The usage of buy now, pay later options is becoming increasingly popular in retail. It allows purchasers to defer payment for a product they can take home right away, as the name implies.
It’s a tempting arrangement that allows you to gain what you want now while paying for it. Isn’t it too wonderful to be true? Read through this article to learn more about buy now pay later loans.
How does buy now and pay later work?
Anyone who prefers using a product or service now and paying later uses buy now, pay later. A fashion retailer, for example, can allow customers to purchase that new pair of jeans, dress, shoe, or other desirable item as soon as they see it. Rather than having to wait because they can’t afford it right now.
A buy now, pay-later arrangement is essentially a short-term loan.
How do I get buy now and pay later loans?
Getting a short-term loan through the Buy Now Pay Later plan highly depends on the individual or organization providing the loan and the type of business they operate. Regardless of the lender’s business model, getting a loan from them will cause the following steps:
- When applying for a loan under this program, the borrower must first specify the product he wishes to purchase. This could be a phone, technological accessories, or something else entirely.
- The borrower fills out an application for the loan amount, which is equal to the value of the item(s) selected, after selecting his product of interest.
- The lender grants the loan by providing the loan agreement to the borrower after doing background checks and due diligence on the borrower.
- If the loan’s terms are acceptable to the borrower, he signs it and receives the cash. Thereafter, repay the loan on installments.
However, as previously said, depending on the lender, different conditions must be met. Some creditors will want a portion of the product’s value, usually expressed as a percentage of the product’s value.
Other loan companies in Ghana limit their lending to salaried staff in order to assure timely returns. Before applying for a loan through this plan, make sure you understand the lender’s terms and conditions.
Advantages of buy now and pay later
- If you make payments on time before the loan period ends, there is the possibility of paying no additional interest.
- The benefit of being able to purchase desired products on the fly without missing out.
- It reduces and eliminates buyer apprehension.
- Because more consumers can make purchase orders, the average order value for shops rises.
- It leads to a rise in overall sales.
- The loan interest generates an alternative source of revenue.
Sometimes you have to look through the attractiveness of the buy now, pay later schemes and avoid anything that can tempt you to make impulsive purchases. Typically, the loan amount under this plan is small, and they do not offer consumers cash loans.