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What happens if I can’t pay back a Buy Now, Pay Later (BNPL) loan?

Most BNPL companies charge late fees if you don’t make payments on time. Your missed payments may lead to the lender freezing your account to stop further purchases, and your debt could be turned over to a debt collector.

If you do not repay your BNPL loan, your debt could be turned over to a debt collector and it could be reported to a credit reporting company and hurt your credit scores.

Although you can generally qualify for a BNPL loan without a hard credit inquiry, make sure you have a good understanding of your finances and whether the payments will fit within your budget. Just because you qualify for a BNPL loan, or any other credit product, doesn’t mean you should use it. Contact a qualified financial advisor if you need help creating a budget or check out our budget resources.

Military servicemembers can also reach out to their installation’s Personal Financial Manager (PFM) or a DoD Personal Financial Counselor (PFC) if they need help budgeting or understanding financial products like BNPL loans.