Buy Now, Pay Later (BNPL) apps promise a simple idea — shop now, pay later, often with zero interest. With festive season discounts and smooth one-tap payments, many users see it as easy money. But Abhishek Kumar, Sebi-registered investment adviser and founder of Sahaj Money, believes the dangers often show up only later.
“Buy Now Pay Later is basically lending candy to yourself. ,” he wrote on LinkedIn.
A recent real-life case he shared proves this point. During Diwali, one user borrowed a total of Rs 85,000 across five BNPL platforms. At first, it felt manageable — small instalments, zero interest, seamless payments.
But things quickly changed.
“One missed EMI turned a Rs 500 late fee into Rs 2,300. His credit score took a hit. Now he’s handling a debt pile that began as ‘just essentials’,” Kumar says.
Most BNPL offers promote interest-free credit, but only for a limited time. Once that window closes, interest charges kick in just like any other loan.
“That zero interest has an expiry date. After that? You’re paying interest on EMIs. Always read what happens after the offer period,” says Kumar.
Many assume BNPL is completely free if repaid on time. But there are often processing charges, convenience fees, or penalties for failed or delayed payments that users notice only later.
“Not all BNPL is interest-free. Fees, penalties, and add-on charges can add up faster than you expect,” he warns.
BNPL payments are reported to credit bureaus just like personal loans and credit cards. That means a late payment is not a minor slip — it can lower your credit score.
“A missed EMI is not a slap on the wrist. It hits your credit file and stays there,” says Kumar.
Many payments are set to auto-debit from bank accounts. But if there isn’t enough money on the due date, payments fail and penalties begin.
“Your auto-debit can fail without warning. Always track your due dates and keep the account funded,” he advises.
Some BNPL apps offer limits from Rs 2,000 up to Rs 1 lakh. Easy access can create a false sense of affordability.
“That limit is your maximum debt capacity, not your spending goal. Just because you can borrow doesn’t mean you should,” Kumar reminds users.
Unlike bank loans or credit cards, BNPL feels quick, casual and harmless — no paperwork, no long process, just click and buy. That ease can blur the reality of borrowing.
“BNPL makes debt feel invisible — no bulky documents, no bank queues. Just taps on a screen and boom, you’re borrowing,” he says.
Kumar suggests treating BNPL like a financial tool, not a lifestyle support system.
“Use it only for planned essentials you would buy anyway. Never for impulse shopping or to cover gaps between paydays,” he concludes.