BNPL. Easy Installment Plans for Online Shopping
Find the convenience of BNPL services for online purchases. Shop now and pay later in the Philippines with no interest and no fees. Choose from the best BNPL plans to suit your budget and enjoy a smoother shopping experience.
Veronica
Editor
Veronica
Update date 07.02.2024

What is BNPL Financing?

Buy Now, Pay Later (BNPL) in the Philippines refers to a payment method that allows consumers to make online purchases and pay for them at a later date through flexible payment options. With BNPL, customers can choose to split their payments into interest-free installments, spreading the cost of their purchases over time. This alternative payment method goes beyond traditional credit cards and bank transfers, offering consumers increased flexibility in managing their finances.

Features

  1. Flexible Payment Options. BNPL in the Philippines offers consumers flexible payment options, allowing them to split their purchases into interest-free installments. This flexibility caters to various budgetary constraints and financial preferences.

  2. Credit Limits. Customers using BNPL services are assigned a credit limit, which determines the maximum amount they can spend. This credit limit, along with payment flow, installment plans, and credit history considerations, ensures responsible spending.

  3. Transparent Fee Structure. BNPL providers may charge processing fees or fixed fees, but the absence of interest rates contributes to a transparent fee structure. This transparency allows customers to understand the cost of their purchases without the uncertainty of accruing interest charges.

  4. Ease of Use for Online Shopping. BNPL is well-suited for online shopping in the Philippines, providing a convenient payment method for consumers making purchases on various e-commerce platforms. This aligns with the growing trend of online transactions in the country.

  5. Soft Credit Checks. The application process for BNPL typically involves soft credit checks, minimizing the impact on the customer's credit score. This makes BNPL accessible to a broader customer base, including those with varying credit histories.

Pros and Cons

Pros

Flexible Payments. BNPL offers flexible payment options, allowing customers to split their purchases into manageable monthly installments. This flexibility is particularly advantageous for those with varying budgetary constraints.

Increased Purchasing Power. By providing maximum credit limits and installment options, BNPL increases the purchasing power of consumers. This enables them to make both everyday purchases and larger transactions without the need for substantial up-front payments.

Convenient for Everyday Purchases. BNPL is well-suited for everyday purchases, offering a convenient payment option for routine expenses. This makes it a practical solution for consumers who want to spread the cost of their regular shopping over time.

Transparent Repayment Terms. BNPL services typically come with transparent repayment terms, including fixed fees and equal payments. This transparency helps customers understand the total cost of their purchases without the complexity of interest charges.

Cons

Risk of Accumulating Debt. One of the drawbacks of BNPL is the potential risk of accumulating debt. While it provides financial flexibility, consumers may be tempted to overspend, leading to a situation where they struggle to meet their repayment obligations.

Possibility of Late Fees. Late fees are a common concern with BNPL. If customers miss their monthly payment deadlines, they may incur additional costs in the form of late fees, impacting the overall affordability of the purchase.

Impact on Financial Future. Using BNPL without careful consideration can impact a consumer's financial future. It may influence their credit history and credit score, affecting their ability to access other forms of credit or loans in the future.

False Sense of Affordability. BNPL may create a false sense of affordability, especially among new customers. The convenience of spreading payments over time might lead individuals to overlook the cumulative cost, potentially leading to financial strain.

How to Get BNPL Financing?

Apply for a loan

  1. Choose a BNPL Provider. Start by selecting a reputable BNPL provider in the Philippines. Research available options, considering factors such as customer reviews, available merchants, and terms of service.

  2. Install BNPL App or Access Online Platform. Download the BNPL app or visit the provider's online platform. Create an account by providing the required personal information and completing the registration process.

  3. Complete the Application. Fill out the application form, including details such as your name, contact information, and sometimes your financial information. The application may involve a soft credit check to assess your creditworthiness.

  4. Receive Approval and Credit Limit. Once your application is processed, you'll receive approval along with information about your assigned credit limit. This limit determines the maximum amount you can spend using the BNPL service.

  5. Start Making Purchases. With your BNPL account approved and your credit limit established, you can start making purchases through the platform. Choose the BNPL option at checkout when shopping online, and select your preferred repayment terms to enjoy the flexibility of paying over time.

Requirements and Conditions

Requirements

  1. Valid Identification. A government-issued ID, such as a driver's license or passport, is typically required to verify your identity during the BNPL application process.

  2. Mobile Phone or Email Address. You need a valid mobile phone number or email address to receive communication from the BNPL provider and complete the registration and verification steps.

  3. Bank Account. A linked bank account is often necessary for BNPL transactions. This account is used for processing payments and determining your creditworthiness.

  4. Proof of Income. Some BNPL providers may request proof of income, such as payslips or employment details, to assess your ability to make repayments and determine your credit limit.

  5. Age Requirement. Most BNPL services in the Philippines have an age requirement. Typically, applicants need to be of legal age, usually 18 years old or older, to qualify for BNPL services.

Conditions

  1. Credit Limit. BNPL services in the Philippines impose a maximum credit limit on users, dictating the highest amount they can spend using the BNPL option.

  2. Repayment Period. Users are provided with a specified repayment period, during which they must settle their outstanding balances from BNPL purchases. This period varies depending on the BNPL provider and the terms of the transaction.

  3. Interest Rates. While BNPL transactions in the Philippines typically offer interest-free installment options, users should be aware of any applicable interest rates for late payments or additional services.

  4. Late Fees. BNPL providers may charge late fees for missed or delayed payments beyond the agreed-upon due dates. These fees can significantly increase the overall cost of purchases if not paid promptly.

Best Places to Get BNPL Financing

  1. TendoPay is a well-known BNPL provider in the Philippines. It collaborates with various merchants to offer installment plans and flexible payment options to consumers, allowing them to make purchases without the immediate need for full payment.

  2. Atome is another leading BNPL provider in the Philippines, known for its seamless payment experience and transparent repayment terms. With Atome, customers can split their purchases into interest-free installments and enjoy a hassle-free shopping experience.

  3. BillEase is a BNPL service that allows users to split payments into installments for various online purchases. It offers a straightforward application process and flexible repayment terms.

  4. Grab PayLater is a BNPL service by Grab, a popular ride-hailing and super-app platform. Grab users can leverage PayLater to make purchases with flexible payment terms, extending the convenience of BNPL beyond just transportation services.

Best Places to Get a Loan Today

Digido

Apply for a loan

Digido is an online loan company in the Philippines, offering non-collateral cash loan services. They provide a fully automated online portal for a seamless loan application process. Key features include:

  • Automated application process.
  • Loans for various purposes, including emergency and OFW loans.
  • No collateral required.
  • Online loan calculator.
  • Transparent interest rates, with a commitment to fair lending practices.
  • Loan accessibility for unbanked individuals.
  • Secured operations, fully licensed and registered under the SEC.

Digido

MoneyCat

Apply for a loan

MoneyCat is an online payday loan provider in the Philippines, offering efficient financial solutions with an easy-to-navigate online registration form. Their features include:

  • Swift approval process, usually within 24 hours.
  • Flexible loan amounts ranging from PHP 500 to PHP 20,000.
  • Convenient application methods via website or mobile app.
  • First loan free of charge for new users.
  • Licensed by the SEC, ensuring reliability and legitimacy.

MoneyCat

Finbro

Apply for a loan

Finbro is an online lending platform providing quick loans with durations of up to 12 months and amounts ranging from ₱1,000 to ₱50,000. Their service includes:

  • Online application process that can be completed in 15 minutes.
  • Transparent conditions with no extra costs.
  • 24/7 service availability.
  • Data protection for users.
  • Higher interest rates for repeat loans.
  • No mobile app for accessibility.

Finbro

Kviku

Apply for a loan

Kviku is an online lending institution known for providing short-term loans with a fully automated online service. Their main features are:

    • Simple and user-friendly loan procedures.
    • 24-hour approval process.
    • No hidden fees or charges.
    • 100% online lending experience.
    • Competitive interest rates at 0.16% daily.
    • Flexible repayment terms up to 180 days.
    • Registered and authorized by the SEC, ensuring reliability.

Kviku

Ways to Receive the Money

Borrowers can access funds through BNPL by selecting the BNPL option during the checkout process when making a purchase. Upon approval, the borrower receives a credit limit, and the desired amount is deducted from that limit. The borrower then commits to repaying the borrowed amount in installments over a specified period, typically with associated fees or interest charges. Access to funds is facilitated seamlessly within the BNPL platform or app, providing users with a convenient alternative to traditional payment methods.

Things to Pay Attention To

  1. Interest Rate. Be aware of any interest rates associated with late payments or additional services. Understanding the interest rate is crucial to managing the total cost of your purchases.

  2. Fixed Fee. Take note of any fixed fees that may be charged by BNPL providers. These fees contribute to the overall cost of using BNPL services.

  3. Repayment Options. Evaluate the available repayment options, such as the number of installments and their frequency. Choose a plan that aligns with your budget and financial preferences.

  4. Customer Experience. Consider the customer experience offered by BNPL providers. This includes the ease of application, responsiveness of customer support, and overall satisfaction reported by other users.

  5. Short-Term Financing. Understand that BNPL is a form of short-term financing. Evaluate whether this aligns with your financial goals and if it is suitable for your current needs.

How to Repay BNPL Financing?

  1. Access Buy Now Pay Later Provider. Log in to the BNPL app or website of the provider you used for the transaction.

  2. Navigate to Repayment Section. Look for the repayment or "Pay Now" section within the app or website.

  3. Select Transaction. Identify the specific BNPL transaction you want to repay and select it from your transaction history.

  4. Choose Repayment Option. Opt for your preferred repayment option, such as paying the full amount or selecting installment plans if available.

  5. Complete Payment. Follow the prompts to complete the payment process. Enter any necessary payment details, confirm the transaction, and ensure that your payment is successfully processed.

Reasons for Getting Rejected for a BNPL

  1. Low Consumer Credit Score. A low consumer credit score, reflecting a less favorable credit history, can result in rejection. BNPL providers often consider credit scores when assessing creditworthiness.

  2. Inadequate Average Order Value. BNPL providers may reject applications if the average order value falls below a certain threshold. This ensures that the service remains viable for both consumers and providers.

  3. Limited Repayment Options. If the applicant's repayment options are limited, such as being unable to commit to the required number of installments or paying within the specified term lengths, the application may be rejected.

  4. Incomplete or Incorrect Information. Providing inaccurate or incomplete information during the application process, such as false details about income or personal data, can lead to rejection.

  5. Previous Late Payments. A history of making payments late on previous BNPL transactions or other credit accounts can negatively impact the likelihood of approval for a new BNPL loan.

Alternatives

  1. Personal loans are a traditional form of borrowing where individuals can receive a lump sum amount from a financial institution and repay it through fixed monthly installments over a specified loan term.

  2. Payday loans are short-term, high-interest loans typically intended to cover immediate expenses. Borrowers repay the loan, along with fees, on their next payday.

  3. Salary loans are loans provided to individuals based on their monthly salary. These loans often have favorable terms and are repaid through salary deductions.

  4. Cash advances involve obtaining funds from a credit card issuer. It allows cardholders to withdraw cash up to a certain limit, with repayment usually required on the next billing cycle.

Editorial Opinion

The rise of Buy Now, Pay Later (BNPL) services has undoubtedly transformed the landscape of consumer finance, offering individuals the convenience of deferred payments and flexible repayment options. BNPL has become a popular choice, especially among online shoppers looking to make larger purchases without the burden of up-front payments. While the option provides financial flexibility, consumers should remain vigilant about potential additional costs and interest rates associated with late payments. Many BNPL providers offer repayment in four installments and various repayment terms that cater to diverse consumer needs. However, the effectiveness of BNPL generally depends on responsible usage, a clear understanding of terms, and the availability of participating merchants. As the industry continues to evolve, evaluating the benefits against potential drawbacks becomes paramount, ensuring that BNPL remains a viable and transparent financial service for users.

Important

Keeping your Debt-to-Income (DTI) ratio below 30-40% of your monthly income is crucial. This will help you avoid potential financial problems in the future. Additionally, always assess the necessity and feasibility of taking a loan, ensuring you can comfortably manage its repayment.

How to Choose a Lender in the Philippines

  1. Ensure that the lender is registered with the Securities and Exchange Commission (SEC) of the Philippines.

  2. Investigate if the lender is a member of recognized industry associations in the Philippines, such as the Chamber of Thrift Banks or the Philippines Finance Association.

  3. Carefully examine all terms and conditions of your loan contract. This includes understanding the repayment schedule, fees, and any penalties for late or missed payments.

  4. Payday loans can have high-interest rates. Make sure the contract clearly outlines the interest rate and total cost of the loan, including any processing fees or additional charges.

  5. Familiarize yourself with your rights regarding cancellation. In the Philippines, consumers may have the right to rescind the loan within a specific period after signing the agreement.

  6. Research the lender's reputation through customer reviews, complaints, and feedback available online.

Methodology

In Finanso, we've carried out a comprehensive analysis of over 50 lenders in the Philippines, assessing them based on 35 different parameters across six key categories: accessibility of loans, customer relations, quality of service, interest rates, and transparency of conditions.

In each category, we carefully considered the most critical factors in selecting a lender. These factors include the interest rates, available loan amounts, minimum credit score, minimum income, application fees, and the speed at which funds are transferred.

At Finanso, we highly value our users, which is why we also focus on the quality of customer service, user reviews, and additional features that can aid our users in making a well-informed decision.

FAQ

How do BNPL loans work?

Is there a buy now, pay later in the Philippines?

What is the difference between an online installment and a shop-now-pay-later?

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