Do buy now pay later and pay on demand apps affect my ability to get a personal loan?

For the most part, this will depend on how you use these services. When you're applying for a personal loan, you are expected to disclose all your debts. This includes your buy now pay later and pay on demand debts. These debts are part of your expenses and should be accounted for. Having outstanding debts will affect how much you can borrow, as it will be counted as a financial commitment. If your debts are high and the lender feels you won't be able to pay your personal loan debt, your application could be rejected. Depending on the service you're using, there may or may not be a credit check involved. Some services may perform a credit check, so it's best to look into that. Any hard credit check will appear on your file. Additionally, if you've missed any of your repayments, or paid late, it may have been reported to a credit reporting agency. This, in turn, will have a negative impact on your credit file and how lenders will view your application. In general, it's best to approach interest-free products with caution. Being too reliant on them to get by may signal that you're spending more than you earn. This, in turn, may work against you as the lender may consider you a risky borrower. If you're using these platforms as a budgeting tool, it's best to stay on top of your payments and use them responsibly. Demonstrate, through your repayment history, that you're financially responsible and capable of meeting your financial commitments.

What can I do if I don’t meet the lender’s income requirements but need a loan?

There are a number of other credit options you can apply for. Some of them don’t charge interest, and so can be more affordable. These include no interest loans , Centrelink advance payments , buy now pay later or pay on demand apps . There are also payday loans, which may have lower income requirements. These loans work out to be more expensive and should be approached with caution.

What if I don’t meet the lender’s credit requirements?

It may be best to work on improving your credit score by paying off your debts and demonstrating healthy financial habits. You could also apply for a bad credit personal loan. These loans can work out to be more expensive, and some should only be used in case of emergencies. It may be more worthwhile to wait it out and improve your credit score before applying again.

Bria Horne

Writer

Bria Horne was a writer for Finder, with a specialist knowledge of personal loans, car loans and business loans. Originally from the UK, Bria has been a professional personal finance writer in Australia for over 2 years. She has an M.A and B.A in Philosophy and Literature from the University of Sussex, and previously worked on the UK’s leading hospitality publication.

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