Buy now pay later (BNPL)

Buy now pay later (BNPL) providers allow you to buy something right away and spread out the cost over time. You don't have to pay any interest, but fees and charges can quickly add up if you miss your payments.

Compare buy now pay later services

Finder survey: How many Australians have used a buy now pay later service?

About half of Australians we surveyed have used at least one form of buy now pay later.

What is buy now pay later?

Buy now pay later (BNPL) is the term used to refer to interest-free credit providers. BNPL allows you to spread the cost of purchases over time rather than paying large amounts of money upfront for items you want or need.

Many people are even cutting up their credit cards in favour of this potentially more attractive shopping solution. However, interest-free doesn't mean it won't end up costing you far more in the long-run.

How does buy now pay later work?

BNPL works by giving you a credit limit which you can use to pay for things. You can then choose a repayment frequency to spread the cost of those items out over time. BNPL providers tend to advertise repaying over something like 4 to 8 weeks, but you can also choose to repay fortnightly or monthly.

It is similar to the interest-free deals major retailers have offered for years by allowing you to delay paying on your purchases. The difference is that you are effectively borrowing money from a third-party provider which is available in a range of different stores, as opposed to a single retail outlet.

Most interest-free platforms, including Afterpay, charge the retailer a fee per transaction. This is how they make most of their money. Retailers benefit from offering options such as Afterpay and Zip because it takes away one of the biggest barriers to closing a sale – it allows shoppers to spend money they don't have.

On top of that, they can also charge various fees if you miss repayments.

How to use buy now pay later

Interest-free: What's the catch?

BNPL providers might advertise that they are interest-free, but they have other ways of charging you extra.

Some will charge monthly account-keeping fees, payment processing fees or early exit penalty fees. They also charge fees for late payments. Because repayments are deducted from your nominated account or card automatically, if there are insufficient funds and you don't reschedule your repayment, you'll be charged a late payment fee.

These late payment fees are usually fairly low, roughly between $2 and $12 for smaller orders. However, these fees can add up and send you on a debt spiral quite quickly if you're not careful.

Compare buy now pay later providers in Australia

Provider	How it works	Costs	Credit check required?	Learn more
Afterpay	Select Afterpay at the checkout online or in-store. Repay in 4 equal instalments over 6 weeks.	Late payment fees of $10 for each late instalment and a further $7 if you still haven't paid the next week. Late fees are capped at 25% of the order value or $68, whichever is less.	Yes	Review
Brighte	Interest-free plans specifically for home improvements or home energy installations.	$2.30 weekly account-keeping fee $75 establishment fee $4.99 late payment fee (capped at $49.90 a year)	Yes	Review
humm	Sign up for humm online or via the app to use at a range of stores and pay no interest. Apply for up to $30,000 with terms of 3 - 72 months.	$30-$110 establishment fee, or; $29 if you've used humm before $8 monthly fee $6 late payment fee	Yes	Review
Klarna	Shop now with over 200,000 online retailers including Myer, H&M, JB Hi-Fi, Amazon, Coles and Woolworths and pay later over 4 interest-free instalments.	Late fees apply based on order value	Yes	Review
PayPal Pay in 4	Select PayPal Pay in 4 at checkout online. Repay in 4 equal instalments over 6 weeks	$30 minimum spend, $2000 maximum spend No fees, including late fees	Yes	Review
Zip Money	Sign up online or at the checkout and receive a line of credit between $1,000 and $5,000. You can then use it at any Zip Money retailer and receive 3 months interest-free.	$0-$99 establishment fee 25.9% rate applies after 3 months to outstanding balance $9.95 Monthly fee applies when you have an outstanding balance Late fees apply	Yes	Review
Zip Pay	Sign up online or at the checkout for a credit limit up to $1,000. You can use your credit line at any Zip Pay retailer.	Up to 60 days fee-free, but a $9.95 monthly fee will apply after this period if you do not repay your purchase in full and will remain as long as you have an outstanding balance Minimum monthly repayment of $40	Yes	Review

All fees and charges have been fact-checked as of September 2026.

Do buy now pay later platforms conduct credit checks?

Since June 2025, all BNPL providers in Australia, including Afterpay, Zip, Klarna, humm and PayPal Pay in 4, have been required to conduct credit checks and meet responsible lending obligations under the National Consumer Credit Protection Act. This typically involves a credit enquiry when you open an account, which can appear on your credit file, and providers can now report missed or defaulted payments to credit bureaus.

Afterpay vs credit cards: Which is better?

What features are offered by buy now pay later platforms?

Each provider offers the following features with its BNPL service:

• Varying loan term. Loan terms vary greatly depending on the provider and the retailer. For small-value purchases, loan terms can be as little as a few weeks to up to 6 months. For larger purchases, you may not have to repay your purchases in full for up to 2 or more years.
• Variable purchasing power. Depending on the provider, you can receive purchases prior to payment costing as little as $35 up to as much as $30,000.
• Repayment frequency. Again, it varies depending on the provider. Line of credit products generally require monthly repayments, whereas merchant payment options are commonly paid back in 4 instalments.
• Convenience. All interest-free finance products can be applied for and approved in minutes at the point of sale or online.
• Paperless. The application process and loan management is done online, so you won't need to physically print or sign anything.
• Wide acceptance. Line of credit debit cards are accepted anywhere normal credit cards are accepted. The merchant payment option is only available at partner merchants. However, there are a number of businesses offering this payment option.
• Ongoing. Unlike a loan, line of credit products do not expire once you pay off your debt. You can keep the card and use it again when required.

What to do if you can't meet a repayment

If you can't meet a repayment, it's important that you contact the BNPL provider you used as soon as possible. Most providers will allow you to defer the repayment date by a week or so without penalty. However, some providers may charge you a late fee for a missed payment.

Missing the payment without contacting your provider beforehand could see you receiving a black mark on your credit file. This could impede your chances of applying for credit in the future. Therefore, it's never a good idea to bury your head in the sand if you think you're not going to be able to meet your next payment.

How to get the most out of buy now pay later

1. Know your rights

Your rights as a customer are likely to vary depending on which BNPL provider you are using. Therefore, it's a good idea to check the terms and conditions of your specific provider rigorously, prior to using its service. Generally, the below applies:

2. Try not to spend more than you need to

It can be easy when using a BNPL scheme to feel like you have a bit more financial freedom. Try to avoid overspending by bearing in mind that while the cost of the payments may be spread out over a longer period, it is the same amount of money and you still need to pay it.

Remembering too that if you buy too much and can't repay, you'll likely end up with late repayment fees. Consider when bills or other costs will come out of your account and factor in the additional charge of the BNPL payments.

3. Set up payment alerts

Most BNPL providers take direct debit payments automatically. If you forget a payment and there isn't enough money in your account, not only might you end up with a late fee but your credit rating could take a dent. Avoid this by setting a reminder a few days before your repayment is due so you can make sure the money is ready in the account.

Or if you know you won't have the cash in time, contact the provider ahead of time to let it know. Often, providers will allow a repayment deferral of a week or more, free of charge, if they are notified in advance.

4. If you want to return an item, do so as soon as possible

To avoid paying for items you've changed your mind about, make your returns as soon as possible. Ideally, you want to send or take items back before your next payment date. While most BNPL providers will refund you in full for returned purchases, it may take a few days for your refund to process. This means more time with less money in your account.

What should I consider before I apply?

The key thing to consider before you apply for BNPL is whether you really need to make the purchase at that time. Can you spend a couple of weeks saving up, instead?

Otherwise, these are some other considerations you'll need to make before you commit:

• Fees. All line of credit providers charge some form of fee. Most fees are associated with cash withdrawals and missing repayments. Some charge a fee for every single transaction.
• Interest. Though most providers don't charge interest, some might charge it after an initial interest-free period. Rates can be high, in some instances up to 29% p.a.
• Minimum repayments. The minimum repayments are unlikely to repay the loan within the interest-free period. If you do not make additional repayments you will be charged interest.
• Credit record entry. Interest-free products are still a type of personal loan and can be recorded on your credit history if you don't meet your repayments. Be cautious of overusing or not repaying these products.

It's important to compare a range of interest-free offers before signing up. You can also consider an interest free credit card with a 0% p.a. introductory offer.

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Frequently Asked Questions about buy now pay later

• What is the most popular buy now pay later in Australia?

  Afterpay is the most popular and widely-used buy now pay later platform in Australia.

• Is there a buy now pay later with no money down in Australia?

  Yes, there are a number of buy now pay later platforms in Australia that allow you to purchase something with no money upfront, including Zip Pay and Humm.

• What is an alternative to Afterpay?

  Alternatives to Afterpay include Zip Pay, Klarna and Humm, which offer similar buy now pay later services and have similar payment plans and fee structures.

• Which pay later app does not check credit?

  Since June 2025, all BNPL providers operating in Australia, including Afterpay, are legally required to conduct credit checks under the National Consumer Credit Protection Act. There is no longer a BNPL app in Australia that skips this requirement.