Buying now and paying later is a good option to postpone your expenses but it is not a good option at all times. Suppose if you have purchased at a large now and paying later that you cannot handle then we provide some options to ease out the burden.
If you are not factoring the recurring payments in the budget then buying now and paying later cannot be an easy payment option.
Spinning your payments between multiple purchases now and paying later plans can cost you highly.
This becomes even more difficult when you have other debts for payment. There are credit enquiries that the lending institutions perform and check the repayment capabilities considering various other factors.
Some of the credit bureaus include buy now and pay later details on the credit report which will show the number of payments that are made to the borrower, number of missed payments and other details. This information is used to support how responsible the borrower is on their payments.
If there is an unpaid buy now and pay later due then this information will be sent to the credit bureau and it will affect your credit history. The lender of buy now and pay later levies late fee charge when the payment is delayed. If the payment is still outstanding then you will be barred from using the credit services.
Here in this article we discuss a few options which can free your money to keep finances on track.
- Look out for financial opportunities
- Find ways for the purchased items
- Changes in payment method & due date
- Check financial hardship
- Passive income
- Debt Consolidation
1. Look out for financial opportunities
Check your monthly budget and track your money to find out where your money is going towards. Make adjustments on non priority expenses. Cut down on subscriptions which you do not use. Find out ways on getting cheap mobile phone plans or shop for non branded clothes, or shop for lower insurance premium plans.
Food, clothing, shelter, medicine are the priority essentials which you cannot skip and neglect. Look out for ways where you can save on these areas. Financial support can be provided for those having a good income.
2. Find ways for purchased items
Some vendors provide an option for returning the item to the seller for reimbursement. Buy now and pay later companies will not provide the facility of refunding cash which is paid on interest. When the refund is pending all the payments will continue to show as due.
Suppose if the seller does not accept returns then you can consider selling the item and get your money back. You can find the purchaser through the online or offline mode. But the deal may reduce the price of the product as it is considered a second hand product.
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3. Changes in payment method & due date
Not making a payment has serious consequences. When you realize that you will not be able to make the payment then get in touch with the buy now and pay later lender and find out the various options available. Every lender has its own terms and conditions. Some may extend the term of payment and some may change the payment due date. Check with the lender on the payment method if that can be changed and also the due date extension.
Align the due dates near to your salary date so that the payment can be made on a priority basis. If you are planning to make payment then choose the best method like payment through a credit card if the lender allows you. When you make payment through credit card you have some buffer time to repay the amount.
4. Check financial hardship
There are financial hardships that may come and these situations are beyond the control of an individual. Some unforeseen circumstances like health emergencies, sudden loss of job, family emergencies and others. Considering these situations the buy now and pay later lenders may provide financial assistance during the hardship. The lender may provide a flexible repayment plan without any additional charges for the eligible hardship borrowers.
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5. Passive income
When you have a passive income it provides additional income support. Passive income from working extra hours will offer you opportunities to pay back debt easily. Having additional income will help you to buy now and pay later easily.
6. Debt Consolidation
Debt consolidation is allowed to buy now and pay later. However you need to qualify for this by having a good credit history and a good credit score. If the borrower qualifies for balance transfer then moving from high interest to low interest payment is a good option. Payment through debt consolidation is good as it benefits on saving the interest payment for the borrower.
Take away
Buy now and pay later is a form of credit card payment wherein the lender provides only a certain amount of money to be used for a certain type of goods. Paying later becomes difficult when the borrower is already having other forms of loan payment. If the lender provides an option of financial hardship then it will come as a support to the borrower. Having a passive income provides additional support to the borrower to buy now and pay later.
About the author
Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.
