Last updated on November 24th, 2023 at 12:21 pm
A growing trend in retail now is the use of buy now and pay later schemes. Just as the scheme implies, it allows buyers to delay payment for a product they can take home immediately.
It’s an inviting deal that lets you get what you want now while you get the chance to pay for it over time. It sounds too good to be true, isn’t it?
How does buy now and pay later work?
Buy now and pay later are being used by anyone who enjoys using a product or service now to pay later. For example, a fashion retailer can allow buyers to get that new pair of jeans, dress, shoe or other desirable items that catch their fancy the moment they see it. Instead of having to wait because they are unable to afford it at the moment.
Buy now and pay later is basically a short-term loan.
How do you get buy now and pay later loans?
Getting a short-term loan under the Buy now Pay later scheme heavily depends on the person or organization granting the loan and the kind of business they operate. Regardless of the lender’s mode of operation, getting a loan from them would require some basic actions highlighted below;
- Applying for a loan under this scheme will require the borrower to identify the product he wants to buy. This could either be a phone, electronic accessories, etc.
- After picking out his product of interest, the borrower fills out an application for the loan amount, which is equivalent to the value of the item(s) selected.
- The lender after some background checks and due diligence on the borrower grants the loan by presenting the loan agreement to the borrower
- If the conditions of the loan are suitable to the borrower, he signs off on it and then gets his product to be making payment in instalments till the loan amount is completely paid off
However, there are certain conditions that need to be met depending on the lender as mentioned earlier. Some creditors would require a partial payment of the value of the product you want to buy. This is usually expressed as a percentage of the value of the product.
While other loan companies in Nigeria restrict their lending services only to salaried employees to ensure prompt repayments. It is essential you understand the terms and conditions of the lender before opting for a loan under this scheme.
What are the Advantages of Buy Now and Pay Later?
The advantages of buy now and pay later include:
- Potential of paying no additional interest if payments are met on time before the loan period elapses.
- The advantage of buying desired items on the go without missing out.
- It lowers and removes buying hesitation for buyers
- It increases the average order value for retailers since more buyers get to place purchase orders.
- It leads to an overall increase in sales.
- Generates a new stream of income through the loan interest.
Sometimes you have to look beyond the good offer of the buy now pay later schemes and avoid anything that will goad you into impulse buying. Usually, the loan amount under this scheme is relatively low and they don’t offer cash loans to customers.