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Tata Capital > Blog > BNPL Vs Personal Loan: What Should You Choose?

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BNPL Vs Personal Loan: What Should You Choose?

BNPL Vs Personal Loan: What Should You Choose?

If you are up-to-date with the emerging digital infrastructure in the country, you must have heard of BNPL- ‘Buy Now Pay Later’ services. Essentially, the rising popularity of simplified credit solutions among people has encouraged many e-commerce platforms, fintech start-ups, etc., = to offer BNPL credit services to their customers.

Compared to personal finance and credit cards, BNPL is a short-term financial solution that helps finance your immediate purchases. Let’s learn about BNPL in detail and understand how it stands against other finance options.

What is BNPL?

Buy Now Pay Later is an instant microloan service that allows you to make small-ticket purchases and split them into easy instalments to be paid later. Many online merchants and fintech companies offer BNPL service to customers as a convenient payment option.

These are unsecured forms of loan that you need to repay through interest-free EMIs within a specified repayment cycle. BNPL service providers use modern technology to understand the customer’s online buying behaviour and payment history. This way, they assess your creditworthiness and offer you a credit limit accordingly.

Additional Read:- Tips to Save Money Through Personal Loans

Buy Now Pay Later Vs Personal loan?

1. Purpose

BNPL is a micro-finance solution to make eligible purchases offered by e-commerce platforms and fintech companies. In contrast, personal finance is an unsecured loan taken to handle financial emergencies and planned or unplanned expenses. With personal finance, there’s no restriction on the end-usage of funds.

2. Loan Amount

Most financial institutions offer personal finance options amounting to Rs. 25 lakhs or even more at attractive personal loan interest rates. Similarly, depending upon the creditworthiness ascertained by the service provider, you can avail of BNPL credit of up to Rs. 1 lakh.

3. Repayment tenure

Most loans come with a flexible repayment tenure of 60 months or above, where you can comfortably pay your EMIs at competitive personal loan interest rates. This makes it an affordable finance option. On the other hand, the repayment tenure for the BNPL credit facility ranges from 14 to 90 days, where you can repay via no-cost EMIs.

4. Access to funds

In the case of BNPL, the lender directly pays the merchant on your behalf, which you have to repay later. However, when the lender sanctions your personal loan, the funds are directly credited to your bank account.

Additional Read:- Here are Some Myths About Personal Loan Which You Should Ignore

What should you choose?

BNPL has emerged as an affordable payment option as it comes with minimal paperwork and higher eligibility. Here, you should make a choice depending on your requirements.

  • Personal finance is a suitable pick for meeting big or unexpected expenses as there is no limit to end-use.
  • If you need to make instant small-ticket purchases and you can easily repay the amount with your funds, it makes sense to opt for BNPL.

In conclusion

Now that you know more about BNPL vs personal finance make a choice depending upon your needs, eligibility, and affordability. And for quick personal finance options, apply with Tata Capital! With easy-to-meet eligibility, a simplified application process, flexible repayment, and an extended tenure of up to 6 years, convenience is in your hands!

Plan your loan repayment with our online personal loan EMI calculator today!

Apply Now

Get an Instant Personal Loan for all your needs !

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