MoneyLife

Where Can I Find Alternative Sites Like Afterpay?

By Cameron Walch
sites like afterpay

Have you ever needed something in the moment but didn’t have enough cash to buy it immediately? Did you know that you can pay for purchases like these with installments? 

As a growing marketplace with many companies competing for everyone’s business, installments are a great alternative. 

We want everyone to make the best decision possible when looking for ways to buy now and pay later. Let’s take a closer look at the concept of sites like Afterpay and introduce you to the best buy-now-pay-later solution!

Understanding the concept of buy-now-pay-later services

Buy-now-pay-later services are similar to loans from a bank, a business, or a person. With loans, a lender provides money to someone who must then pay that money back within a predetermined period of time. 

Loans are often paid back in the form of regular installments, which are most often planned out monthly. The borrower is also charged interest on the money that they initially borrowed. 

Buy-now-pay-later sites are growing rapidly in terms of popularity. They operate in a similar manner to loans from lenders except some come without the high-interest aspect. However, if you miss a payment or fail to pay your installments, then you will accrue additional charges. 

The sign-up process generally starts with approval, which is required by the buy-now-pay-later company to ensure that the borrower is trustworthy and will pay them back, just like banks do prior to approving you for a mortgage, an auto loan, or a personal loan. This process is what’s known as a credit check.

The company offering the loan will only accept a debit card as a method of payment from the borrower once the approval has been granted. The customer can swipe their card at the desired store and boom! Just like that, you’ll pay later. 

It is not like a credit card because your first payment might not be due until a month or so after the purchase is made. But let’s look more closely at credit checks because there are two different types and it’s important that you understand the difference. 

What is a hard credit check? 

When you apply for a loan, your credit report will be checked, meaning your credit score will be obtained and analyzed by the lender. A credit check can possibly leave a negative impact on your score depending on the information gathered and the intensity of the check. Hard credit checks are the type of credit check that lowers your credit score. They are conducted when you apply for new loans, apartment rental applications, and credit limit increases.

What is a soft credit check? 

Soft credit checks will not be reflected on credit scores as it generally is not analyzed quite like a hard credit check. These kinds of credit checks should never impact a credit score. Soft credit checks are often used for pre-approvals and account reviews by current creditors. 

What to look out for with buy-now-pay-later services 

Make sure to check out which retailers the company is partnered with because some of these buy-now-pay-later services are only available at a minimal number of stores. 

Be sure to understand the penalties if you happen to miss a payment, too. Many of these sites inflict major consequences if a payment is late or goes unpaid. 

We hope this article helps choose the right buy now pay later app.

Frequently Asked Questions

How long do hard checks stay on your credit report?

Hard checks will stay on your credit report for two years before they disappear.

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