Buy now, pay later apps have become increasingly popular to help consumers pay off purchases over a longer period of time. Their ease of use, low fees, and often interest-free payments have made them attractive options for shopping both online and in-person. And in a time when many people are living paycheck to paycheck, these apps help people to make purchases that may have been difficult to save up for.
Buy now, pay later apps are a useful tool, but they aren't all created equally. Below we've rounded up our six favorite buy now, pay later apps to help you choose the right one for you.
Founded in 2012, Affirm is one of the original buy now, pay later apps. Affirm allows you to finance purchases of up to $17 500 and split it into multiple payments, choosing between multiple repayment plans. You can pay your purchase off over three, six, or 12 monthly payments.
Affirm doesn't require a hard credit check to prequalify, but keep in mind that if you end up buying with Affirm, they will run a hard credit check and report your payments to the three credit bureaus, impacting your credit history.
Affirm doesn't charge any fees, including late fees, prepayment fees, or annual fees. You might pay interest depending on the size of your purchase, where you're shopping, and the payment plan you choose. If you do owe interest, you'll know exactly how much upfront.
Purchases up to $17 500
No fees, including late fees, prepayment fees, or others
Choose from multiple repayment plans
Accepted at most major retailers
Some transactions require interest
Requires a hard inquiry on your credit report
Afterpay was founded in 2015 in Sydney, Australia, and has since expanded across the globe into the United States, Canada, the United Kingdom, and New Zealand. It allows customers to finance purchases across four payments over six weeks. Afterpay really stands out among other buy now, pay later services in that you'll never pay interest.
To shop with Afterpay, simply shop online or in person as you normally would at participating stores. When you're ready to check out, you'll make the first of four monthly payments. The rest of your payments will happen every two weeks over a period of six weeks.
Afterpay does a soft credit inquiry, meaning using it won't affect your credit score. Spending limits start at $500 and increase as you responsibly use the app. Keep in mind that Afterpay does charge a fee on late payments, which can be 25% of your original order amount or $8, whichever is higher.
Only a soft credit check is required
You won't pay interest no matter the size of your purchase
Your spending limit increases as you use Afterpay responsible
Late fees of up to $8 per late payment
Each transaction is approved separately, and some may be declined
Shorter repayment periods of only six weeks
Klarna is another one of the most popular buy now, pay later apps on the market. It was founded in 2005 in Stockholm, Sweden, and launched in the United States a decade later.
The most significant benefit of Klarna over its competitors is that it comes with plenty of flexible repayment plans. First, you can choose to pay off your purchase in four interest-free payments paid every two weeks. With this payment plan, you won't pay any interest. You can also choose to buy your item now and pay for it in full in 30 days. Like the Pay in 4 option, you won't pay interest. Finally, you can finance a purchase over periods of 6-36 months.
Klarna runs soft credit checks when approving you for its services, meaning it won't impact your credit. You won't pay interest for the Pay in 4 or Pay in 30 options, but you will if you finance your purchase over a longer period. If you miss a payment, you will be charged a late fee of $7 per missed payment.
Flexible repayment options over a period of six weeks to 36 months
No interest on the six-week and 30-day repayment plans
It can be used anywhere that accepts Visa
$7 late fee for missed payments
Potentially high-interest rates on longer financing terms
You've probably already heard of (and may already use) PayPal, but you might not have known that they offer a buy now, pay later option. This feature is available for PayPal users of 18 years or older with an account in good standing. The service isn't available with all merchants yet, but can be used with many retailers you already use PayPal for.
When you use PayPal's Pay in 4 feature, you'll be able to split your purchase into four payments. You'll make the first payment at the time of purchase and subsequent payments every two weeks until the purchase has been paid off. You'll know a purchase is eligible for Pay in 4 at checkout when you use PayPal.
PayPal only runs soft credit checks, meaning it won't impact your credit score. The company doesn't charge interest for purchases on its Pay in 4 service, and it can be used for purchases ranging from $30 to $1500. PayPal currently charges late fees but has announced it will be eliminating them starting October 1.
No late fees starting October 1
A recognizable brand that many people already have an account with
Not available for all purchases you would use PayPal for
Not available for all users or in all 50 states
Splitit was founded in 2012 in New York City with the mission of empowering consumers to use credit while living an interest-free life. What's unique about Splitit is that when you check out, you use your existing credit card. Then Splitit uses your credit card to turn your purchase into smaller purchases over your desired payment term.
Splitit really stands out from other buy now, pay later apps with its generous repayment terms. First, unlike many providers that allow you to split your purchase up into four payments, Splitit allows you to pay your purchases off over 24 payments. And no matter how long your repayment term, you won't pay interest.
Because you're using your existing credit limit, Splitit doesn't require a credit check to sign up or make purchases. There are also no late fees if you miss a payment or pay after the due date.
Payment terms of anywhere from 3-24 payments
No credit check since you're using your existing credit
Requires that you already have a credit card you can use
Not available with AmEx or Discover credit cards
Perpay is a buy now, pay later app specifically designed for those who need help building their credit. When you sign up and make purchases, you won't be subject to hard credit checks. But as you make your payments, Perpay will report them to the three credit bureaus, helping you to boost your credit history and credit score.
When you make a purchase with Perpay, you don't have to pay right away. Your first payment won't be due until your next payday. The catch is that your items won't ship until you make that first payment. You'll make payments that correspond with your pay schedule. For example, if you're paid monthly, then you'll make monthly payments.
While Perpay doesn't require a hard inquiry to sign up, they do require that you hold a reliable job. You'll have to submit pay stubs to prove your income. You won't have to pay interest and won't pay any fees on your purchases.
No hard credit inquiry required to borrow
Reports to credit bureaus to help you build credit
Flexible repayment that corresponds with your pay schedule
No interest or fees
Items aren't shipped until you make your first payment
Spending is limited to Perpay's online marketplace
You have to set up direct deposit for your payments
How did we choose these apps?
With so many buy now, pay later services on the market, you might be wondering how we narrowed it down to our favorites. First, we started by rounding up a list of the popular buy now, pay later apps on the market. From there, we considered factors like loan terms, interest rates, fees, credit checks, and unique features to help choose our favorites. We specifically sought to include apps that offered something their competitors didn't to ensure that every consumer could find the right service for them.
Which buy now, pay later app is right for you?
If you're considering using a buy now, pay later app, it can be difficult to know which is right for you. After all, they all serve a similar purpose but have some critically different features. Here are a few questions to ask yourself when choosing the right buy now, pay later app for you:
What is your credit history like? If you have poor credit, then you may be better off choosing a service that doesn't require a credit check. In fact, you may be best served by one that reports to the credit bureaus to help you build your credit. Perpay is a good example of such a service.
How much are you spending? Each buy now, pay later app has its own spending limits, and for larger purchases, you may be more limited in which you can use. Certain apps, such as Affirm, are specifically designed for larger purchases.
How quickly can you pay it off? Certain buy now, pay later apps only allow for six-week payment terms or charge interest on longer payment terms. Consider how long you need to pay off your purchase and whether you'll be charged interest during that time.
Where are you shopping? Each of the buy now, pay later apps on our list is only accepted at certain retailers, so be sure to choose a service that is compatible with the retailers you plan to shop at.
Are there alternatives worth considering?
The buy now, pay later apps we shared in this article are some of the best on the market, but they certainly aren't the only ones. If you find that the apps listed above don't meet your needs, then you can check out some of the alternatives on the market. Alternatives worth considering include:
How do buy now, pay later apps work?
Buy now, pay later apps allow you to make purchases and pay them off over a longer period of time. You'll usually make one payment at the time of the purchase and then subsequent payments every week, two weeks, or monthly until your purchase is paid off.
How is a buy now, pay later service different from using a credit card?
Buy now, pay later apps serve a similar function as credit cards, as they allow you to make a purchase and pay it off over time. One difference between the two is that buy now, pay later apps often don't charge interest. Additionally, you don't have to qualify with a hard credit check like you would with a credit card.
Finally, buy now, pay later apps don't come with many of the perks that credit cards do, such as cashback and other benefits.
Do you need good credit to use buy now, pay later apps?
Some buy now, pay later apps require either a hard or soft credit check and satisfactory credit to qualify. However, some don't require a credit check at all.
What is the best buy now, pay later app?
There's no one best buy now, pay later app. Instead, it depends on what you need from a service. Each of the services we listed above is best-suited for a specific type of customer or situation.