Afterpay refers to a buy-now-pay-later program that comes with interest-free payments conditions. It was introduced in Australia in 2015 and made its debut in the United States in 2018. below in this article, we will cover the Need To Know About Afterpay.
It’s received massive popularity since then. Its services are used by more than 13 million individuals in the US. In 2020 alone, the firm recorded sales of its products worth over $1 billion in the United States.Â
From this post, you’ll learn everything you need to know about afterpay, how it works, and things to consider before going for this alternative.Â
How Does Afterpay Work?
Consumers can access afterpay services through their websites, the app, or the merchant. The Afterpay phone app is accessible in Apple App Stores and Google play store.
For online shopping, afterpay services are applicable in any retailer store, irrespective of their payment options. If the Afterpay option is not available on the seller’s website, you still get your virtual Afterpay card’s details to provide at checkout from the Afterpay app.
Likewise, if you want to shop in-store, you may download the application, which will produce a digital Afterpay card you can apply in-store.
APR and FeesÂ
Afterpay comes with one financing service: a six-week funding offer with repayments due every two weeks after paying a deposit. Since Afterpay is a short-term funding option, it comes with an average order worth about $155, which isn’t very much money.
On the bright side, however, you won’t incur any interest rates while using afterpay services. But there are penalties for late payments.
According to Amanda, an employee at Afterpay, a consumer who doesn’t pay on time will incur a fee of $8 or up to 25% of their afterpay debt—whichever suits the customer. Besides, they won’t access Afterpay’s platform until they pay the debt in full.
As a customer, you can request to reschedule your second and third payments if you can’t make them on time. However, you must do this ahead of the due date—within not less than 24 hours of the repayment date. Fortunately, a customer can change one payment for each order to evade late fees.
Alternatively, you can turn to payday loan options from vivapaydayloans.com.au if you can’t afford to pay the debt in time.Â
How To Apply For a Loan
Applying for Afterpay services is super easy. All you’ll need is to download the app; from Google or Apple app store and sign-up. You will be required to provide your phone number, email address, credit card, or a debit whenever you want to buy something.
Afterpay doesn’t check a customer’s credit history during evaluation; Instead, it uses its unique risk appraisal strategy. Their model looks at things like the worth of the order, how much you have on your credit or debit card, and how long you’ve been using Afterpay services.
Payment Methods
Afterpay debts can be repaid using either a credit card or debit card. According to statistics, about 90% of afterpay customers prefer debit cards to settle their afterpay debts.
Afterpay also comes with an “autopay” repayment alternative, meaning the firm will automatically withdraw the cash from your card (credit or debit) on the agreed installment due date. This will save you from worrying about forgetting to pay and paying a late fee.
Loan Amount
Afterpay doesn’t have strict restrictions on how much money you can get. The amount one qualifies for is often determined by your repayment track and the store’s rules where you buy things. The more often you pay your debt timely, the more funds you qualify to use.
Afterpay uses various factors when deciding the amount a customer is eligible to spend. These things include whether set payments were turned down, how often late payments happen, and how late the customer made the payment.
Impact on Credit Score
Using Afterpay services does not influence your credit score—either positively or negatively. The buy-now-pay-later provider does not conduct credit checks on their customers and is not obligated to report their activities to credit bureau institutions.Â
Goods Returns
If you bought something through Afterpay and want to return it, you can contact the store. However, you’ll keep paying for your purchase until your return request has been processed by the store where you bought the item. Alternatively, you can contact Afterpay to delay your due dates while the return process is underway. Â
Bottom Line
Afterpay is a simple way to pay for things that cost less as it’s interest-free. However, it’s worth noting that failure to pay the afterpay debts on time will attract penalties. What’s more, your afterpay payment records do not affect your credit score as they don’t report to credit agencies and do not carry out the credit background of applicants.
