In today's fast-paced world, everyone wants to keep up with the latest trends in fashion, technology, and household items. But often, our budget doesn't allow us to make these purchases outright. This is where the concept of "Shop Now, Pay Later" comes into play.
Shop Now, Pay Later is a flexible payment option that allows customers to purchase items they want or need now and pay for them later. It works like a credit card, but with some different features and benefits.
There are various types of Shop Now Pay Later options available, including consumer durable loans. Consumer durable loans are a type of financing that allows customers to purchase expensive items such as appliances, furniture, electronics, and other durable goods. These loans come with flexible repayment options, making them an attractive financial option for many consumers.
One such popular BNPL method is the Bajaj Finserv Insta EMI Card that offers a pre-approved loan amount of Rs. 3 lakh for the cardholders. The card allows users to make purchases online or in-store and convert the payment into interest-free EMIs (Equated Monthly Installments). Users can avail the pre-approved amount and payback in easy monthly installments, without paying any interest amount.
The popularity of Shop Now Pay Later has been on the rise in recent years. According to a report by McKinsey & Company, the global payments landscape is expected to experience significant growth and transformation in the coming years, and flexible payment options are predicted to become increasingly popular.
So, what are the reasons behind the rise of Shop Now, Pay Later and consumer durable loans?
Convenience: Shop Now, Pay Later options offer consumers the convenience of making the purchases they want without having to worry about immediate payment. This makes it easier for customers to manage their budget and helps them avoid making large purchases outright. The flexibility of these payment options can be especially beneficial for those who are facing financial hardships or those who want to save up for a future expense.
Easier Access: With the rise of e-commerce and online shopping, Shop Now, Pay Later options have become even more accessible. Online retailers offer consumers the option to pay through these financing options at checkout, making it easier for customers to purchase items online without worrying about their current financial status.
No Credit Check: Shop Now, Pay Later options often require no credit check, making them accessible to people with less-than-perfect credit history. This feature makes it easier for individuals to make purchases and avoid incurring financial obligations that are beyond their means.
Flexible Repayment Options: Consumer durable loans, in particular, have a significant advantage when it comes to repayment options. These loans are typically offered with flexible repayment terms that allow customers to pay back the loan in instalments instead of in one lump sum. This makes it easier for consumers to manage their budget without having to worry about large expenses.
Increased Sales: Shop Now, Pay Later options have also proven to be beneficial for retailers. These payment options have been shown to increase sales for retailers by 30-40%, as customers are more likely to make purchases if they have an option to pay later. This also means that retailers can offer more expensive items and still increase their sales.
However, while the rise of Shop Now, Pay Later options and consumer durable loans has brought about many benefits, it's important to be aware of the potential risks involved.
High-Interest Rates: Shop Now, Pay Later options may come with high-interest rates, making them more expensive in the long run. It's essential to read the terms and conditions carefully and consider other options, such as traditional loans or credit cards, before making a decision.
Risk of Overdue Payments: Delinquent payments can attract hefty penalties and affect one's credit score. It's important to ensure that one can keep up with the repayment schedule before committing to a consumer durable loan or a Shop Now, Pay Later option.
Ultimately, Shop Now, Pay Later options and consumer durable loans offer convenience and flexibility that traditional payment options do not. These financing solutions make it easier for individuals to manage their budget and purchase the items they need or want. However, as with any financial decision, it's essential to consider all the pros and cons before committing to any long-term payment plan.
As the global payments landscape continues to evolve, we can expect to see more innovative and flexible payment solutions in the future. Regardless of how the landscape changes, however, it will always be crucial for individuals to make informed decisions and manage their finances responsibly.