PayPal Pay in 4 Review 2023: Interest-Free Payments

GOBankingRates Score

4.3
SCORE
GOBankingRates Best Banks 2023 scores and rankings are objectively determined by our research/editorial team. Our scoring formula weighs several factors that differ from category to category depending on what consumers want from varying products and banks.
Quick Take: Pay in 4 is PayPal's version of a "buy now, pay later" plan. It lets you split your purchase amount into four payments and pay over time. You can buy from millions of online stores that use PayPal and get an instant approval decision. All payments are interest-free, and the purchase is backed by the security and safety of PayPal.
  • Fees
    5.0
  • Availability
    4.0
  • Repayment Flexibility
    4.0
  • Purchase Size
    4.0
How did we calculate this?

Pros

  • You can split purchases into smaller payments and pay over time.
  • Millions of online stores accept PayPal payments.
  • You get an instant approval decision when you choose to use Pay in 4.
  • Payments are interest-free and there are no additional fees for using Pay in 4.

Cons

  • Purchases are limited to $1,500.
  • Pay in 4 is only available at online merchants that accept PayPal.
  • PayPal offers fewer repayment options than competitors.

What Is PayPal Pay in 4?

PayPal Pay in 4 is a payment option that lets you split purchases you make at participating online stores into four payments. You pay a down payment at the time of sale and then one payment every two weeks for the next six weeks, for a total financing period of six weeks.

How Does PayPal Pay in 4 Work?

When you select PayPal and then choose the “Pay Later” option at checkout, you’ll fill out a brief application. Once PayPal approves it, you’ll pay 25% of the purchase price as a down payment and make an additional payment once every two weeks over the next six weeks.

Who Should Use PayPal Pay in 4?

PayPal Pay in 4 can be a good option for those looking to split a more expensive purchase into installments. You can use Pay in 4 at merchants that accept PayPal payments in any supported currency. PayPal will automatically convert the purchase amount into U.S. dollars during the checkout process.

PayPal sets purchase limits for Pay in 4, and will typically only approve this payment method for transaction amounts between $30 and $1,500. PayPal might not allow Pay in 4 for certain recurring subscription services, according to the PayPal website, and availability depends on the merchant. 

Who Shouldn’t Use PayPal Pay in 4?

Those looking to finance a purchase for over $1500 should look for another buy now, pay later service. Do not use PayPal Pay in 4 for impulse purchases or for items you will not be able to afford. If you will not be able to pay off the purchase within the allotted time the debt may go to collections.

How To Use PayPal Pay in 4

To use PayPal’s Pay in 4 option, the seller must support PayPal payments. That means you can use this option at millions of online stores that support PayPal. Popular merchants include Best Buy, Target, Bed Bath & Beyond and Lands’ End.

To use PayPal’s Pay in 4 at checkout, complete your purchase and then follow these steps: 

  1. Under payment method, choose “PayPal.”
  2. Select the “Pay Later” option.
  3. Under “Pay Later,” select “Pay in 4” as your way to pay. 
  4. You will be given a link to the loan agreement for Pay in 4. The details will also be sent to your email once the purchase is complete. Review and approve your loan agreement. 
  5. PayPal will make an approval decision within seconds so that, if approved, you can complete your purchase right away. 

To complete your purchase, you’ll have to pay the first payment as a down payment. The rest of the purchase amount is split into three interest-free payments, with one due every two weeks. You can manage and make payments either online or via the PayPal app, available on iOS and Android.

If your request to use Pay in 4 is declined, you can still use PayPal to pay; you’ll just need to pick a different payment method from your wallet. PayPal will send you an email stating the reason you were declined.

Does Pay in 4 Charge Fees?

There are no fees to use Pay in 4. Payments are interest-free. Additionally, as of Aug. 18, 2021, PayPal no longer charges late fees for its buy now, pay later products.

Does Pay in 4 Affect Your Credit Score?

PayPal may perform a soft check on your credit when you apply for Pay in 4, but this will not affect your score.

soft credit check gives the lender the ability to review your credit report and determine creditworthiness. While these soft checks don’t affect your credit score, they are listed on your credit report.

Can You Pay off a Pay in 4 Plan Early?

When you start a Pay in 4 plan, you make the first payment at the time of purchase. To see your remaining payments, you can log in to the website or PayPal app to view your account summary. Your account summary shows your total purchases and their dates, how many payments you’ve made and your total payments to date, your remaining balance, and the date and amount of your next payment due.

From there, you can make an extra payment or pay off the entire plan early. There are no penalties or additional fees to pay it off early.

Any extra payments are applied and displayed in your plan activity immediately.

Keep In Mind

Buy now, pay later plans are exploding in popularity. Still, analysts warn about increasing debt and credit card balances, especially for younger consumers. Always be sure that you can afford the payments before you purchase.

Comparable Buy Now, Pay Later Options

More and more companies are offering buy now, pay later plans, so PayPal isn’t the only option out there. Here are a few competitors to be aware of.

Klarna

Klarna was founded in 2005 in Sweden and also offers a Pay in 4 plan. Like PayPal, you can pay for your purchase with four interest-free payments over time. Klarna also has options for paying in 30 days and monthly financing.

Sezzle

Like the others, Sezzle offers a four-payment plan. As long as you make your payments on time, there are no fees, and payments are interest-free. Sezzle is currently accepted at more than 44,000 online stores. Unlike PayPal, Sezzle does not have fixed credit limits. Sezzle evaluates your limit with every purchase based on a soft credit check, your order history with the service, how long you’ve been a customer and a few other factors.

Affirm

Affirm offers a buy now, pay later loan with an interest rate based on your loan term and your credit. Affirm is currently partnered with over 168,000 merchants. Your rate will be 0% to 36% APR. The purchase limit for Affirm is $17,500, and a down payment may be required.

Afterpay

Afterpay also offers a four-payment plan that pays off your purchases online or in certain stores in six weeks. To sign up, you’ll need your email, phone number, physical address, date of birth and a debit or credit card. There’s no interest, but you could be hit with late fees totaling 25% of your purchase if you fall behind on your payments.

Final Take

PayPal’s Pay in 4 feature is an excellent option if you want to make a large purchase more affordable by paying it over time. It only works if the merchant accepts PayPal, but millions of online stores do. You’ll enjoy interest-free payments every two weeks, and you can pay it off early if you choose.

PayPal Pay in 4 FAQ

Buy now, pay later services are growing in popularity, but they're still unfamiliar to many consumers. These frequently asked questions will help you understand more about how PayPal Pay in 4 works.
  • Does PayPal Pay in 4 approve everyone?
    • PayPal states that it does not approve 100% of Pay in 4 applications.
  • Is it hard to get a PayPal payment in 4?
    • Approval depends on PayPal's internal checks and the soft check of your credit score. You must be at least 18 years of age, and your PayPal account must be open and in good standing.
  • Why is PayPal not giving me the Pay in 4 option?
    • Currently, PayPal offers Pay in 4 in all states except Missouri, New Mexico, Nevada and the U.S. territories.

Chris Ozarowski contributed to the reporting for this article.

DIVE DEEPER

Discover the Best Banks of 2024: Unveiling Our Top Picks!

We've compiled a list of the top banks for this year!

TAKE POLL

TAKE ACTION

Here Are the Pros and Cons of Using Multiple Banks

Shot of a woman using a laptop while going through paperwork at home.

Many banks are one-stop-shop financial institutions...

BEFORE YOU GO

See Today's Best
Banking Offers