If you’re looking for the modern equivalent of lay-buy, it’s Buy Now Pay Later (BNPL) no credit check. The only difference is that you acquire the product immediately and pay for it in instalments with BNPL.
So are these loans legal, and would securing them be a good financial decision? We’ll break it down.
What this article covers:
- What Is Buy Now Pay Later with No Credit Check?
- Who Offers Buy Now Pay Later Services?
- Can You Pay Later with No Credit Check?
- Are Pay Later No Credit Check Services Legal?
- Do You Qualify for a BNPL Loan?
- Uses of a BNPL Loan
- Pros of BNPL Loans
- Cons of BNPL Loans
What Is Buy Now Pay Later with No Credit Check?
This service allows you to purchase items without paying any upfront costs. The price is divided into several interest-free equal instalments over six to eight weeks. Then, they’re automatically deducted from the credit card attached to your BNPL account, which means you must confirm that there are enough funds in your account.
This style of finance began a while ago in Australia before gaining popularity during the pandemic, which makes sense considering the numerous layoffs and economic crisis. From July 2021 to September 2021, there were 5.9 million active accounts with BNPL activity, which amounted to over $11.9 billion in the FY21-period transactions.
Moving on to the no credit check aspect, it means that these companies don’t check your credit history. More specifically, they don’t run hard credit inquiries, but some may opt for soft inquiries.
Note that hard inquiries appear on your credit report, and an excess of these checks can take a toll on your credit score.
Who Offers Buy Now Pay Later Services?
If you’re looking for the best Afterpay companies with no credit check, many offer BNPL no credit check, including Afterpay, ZipPay, Humm, Splitit Fupay, Openpay, and Laybuy.
As for banks, they were initially hesitant about this type of financing but later entered the market. Key banks offering them are CommBank, StepPay, and NBA New Pay Later.
Can You Pay Later with No Credit Check?
Ultimately, it depends on the service provider and their criteria of assessment. Some lenders may offer no credit check pay later services. Others may conduct soft inquiries to confirm your information. For instance, Afterpay and Splitit don’t run credit checks, but ZipPay, ZipMoney, Openpay, Laybuy, Klarna, Bundll, and Latitude Pay do.
If this matters to you because you have a low credit score, let us assure you that you can get loans now and pay later even with bad credit. All you have to do is work with companies that have flexible requirements. Find ones that prioritise your current ability to repay a loan over your past mistakes.
Are Pay Later No Credit Check Services Legal?
To answer that question, you should understand that the BNPL sector is subject to a voluntary code of conduct, which demands that service providers conduct an assessment to ensure you can afford a BNPL loan.
However, it doesn’t specify which measures to take, so lenders can perform soft inquiries into your credit or skip this step altogether. In that case, they’ll have different criteria.
It’s worth noting that the federal government has expressed interest in adjusting regulations so that BNPL is treated like any credit product under Australian Law. If that happens, you can expect a more detailed evaluation process to be in place.
Do You Qualify for a BNPL Loan?
Your eligibility will depend on the company you’re working with. Some will conduct soft credit checks, while others won’t. But the basic requirements are as follows:
- Being at least 18 years old
- Having a personal email address
- Having a mobile phone number
- Having an active credit or debit card
- Being an Australian citizen or permanent resident
- Having a balance on your credit card
Uses of a BNPL Loan
Which purchases are made available via BNPL financing? You can pay monthly with no credit check to get:
- Mobile Phones: Various telecommunications providers and technology retailers offer phones with interest-free finance, including The Good Guys, Officeworks, Big W, Kogan, and Catch.com.au.
- Furniture: Some furniture retailers that have partnered with credit providers are Fantastic Furniture, Pillow Talk, Bed Bath N’ Table, and Sheridan.
- Beauty Products
- Books
- Flights
- Clothing
- Gym Supplements
- Hair Products
- Hotel Bookings
- Equipment and Tools
- Shoes
- Electronics
- Pet Products
- Toys and Games
- Appliances
- Beds and Mattresses
- And more!
Pros of BNPL Loans
BNPL loans are beneficial for many reasons, which are:
No Interest
The main advantage of this financing approach is that it involves no interest. Unlike hard money loans and credit cards, you simply pay the cost of your purchase.
No Upfront Fees
You don’t have to pay upfront fees or a deposit to make your purchases. This way, nothing will stand between you and replacing your fridge or buying a mattress.
Convenience
Online retailers have made the purchasing process easy and simple. Also, skipping credit checks saves you time, which explains how you can sign up and get approved for a BNPL loan almost instantly.
In a way, that makes it a loan with no paperwork or interest. If you can’t get cash before your payday, this will come in handy when you’re out shopping and spot a catch.
Accessibility
Thanks to the grey area about BNPL service eligibility, Australian citizens with bad credit have a chance. Some of the BNPL retailers don’t check your credit at all, so there’s no standard to live up to.
Cons of BNPL Loans
Some drawbacks of BNPL financing are:
No Consumer Protection
Retailers may not perform credit checks and aren’t bound by the same obligations for cash bridge loans, direct finance loans and other loans, which are set to protect borrowers. Without them, retailers don’t confirm your ability to repay the loan or afford its repayments.
Accordingly, you might find yourself buying many items using BNPL financing and unable to pay for them. To prevent these, you must possess impulse control and financial literacy. Otherwise, you might find yourself with a decreased credit score and tons of late payment fees.
Difficult Refunds
Although available, refunds are tricky because they must be issued by the retailer and the loan provider. There’s also the return policy to consider. This makes the process lengthy and time-consuming.
Final Verdict
Ultimately, pay later with no credit check financing is a viable option if you’re looking to make a purchase and don’t have the money. It’s easy to secure and one of your cheapest options. But with the unclear assessment requirements, make sure you only buy what you can afford.
Was the guide helpful? Check out these extra resources to delve deeper:
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- Loans for White Goods: What You Can Avail and Its Alternatives
- Secure a Loan with a Guarantor, No Credit Check
- Everything to Know About Guaranteed Instant Approval Cash Loans
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- Breaking Down Loans for 18 Year Olds: Your Ultimate Guide
- Is There a Loan for Casual Workers in Australia?
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- I Need a Loan: Different Types of Loans You Can Choose!
- All About a $10,000 Loan in Australia