5 Best ‘Buy Now, Pay Later’ Apps and Services of 2021

A black woman makes a purchase on her smartphone.
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If you shop online, you may have noticed an increase in the number of new payment options available. Events over the past year, including the pandemic, have consumers looking for more ways to save money on the things they need and want. People are rethinking how they manage their finances in the current economy.

A fairly new financial concept — “buy now, pay later” — has entered the online shopping scene. According to Adobe Analytics data, online consumer sales using the BNPL method increased 215% year over year in January and February of 2021.

As financial uncertainty continues to burden consumers, retailers are offering BNPL options more often.

Whether you’re making small, medium or large purchases, BNPL apps make it easier for you to get what you need now and pay for it in the future. Continue reading to discover five of the top BNPL apps and services for 2021.

Make Your Money Work for You

How Buy Now, Pay Later Apps and Services Work

BNPL services are similar to the old layaway system of shopping. The difference is that with layaway, shoppers had to make installment payments before taking possession of the items. With BNPL services, you can own the items upfront and then make flexible installment payments over time.

Most BNPL services typically work the same way:

  1. Shop online at participating retail websites or directly in the BNPL app.
  2. Click an available BNPL link to apply for flexible payments and provide the requested personal information.
  3. If you are eligible and approved, select the BNPL payment option at checkout.
  4. Choose and agree to your payment schedule and interest rate (if applicable).
  5. Confirm your purchase.
  6. Make your payments directly to the BNPL company according to your agreed-upon payment schedule until the purchase is completely paid for.

A Quick Glance at 5 Top Buy Now, Pay Later Apps and Services

Here’s a look at five of the best BNPL apps and services available to shoppers and their terms.

Buy Now, Pay Later service Interest Rates Fees Payment Terms and Flexibility
Affirm Between 0% and 30% fixed, simple interest No fees Pay in three, six or 12 months
Afterpay No interest Initial $10 late fee; additional $7 after seven unpaid days; capped at 25% of purchase price Pay in four installments due every two weeks
Klarna No interest when paid in four installments or in 30 days; 19.99% APR on six- to 36-month financing Late fee of up to $7$35 and returned payment fee of up to $25-$35, depending on payment plan Pay in four installments due every two weeks; 30-day and six- to 36-month terms also available
PayPal Pay in 4 No interest Vary by state Down payment at the time of purchase; three remaining installments every two weeks
Splitit No interest No fees Pay in three, four, six or up to 24 installments
Make Your Money Work for You

1. Affirm

To create an account with Affirm, you must provide your mobile number and additional personal information, including your name, email address and birthdate. Affirm carries the advantage of eliminating missed payments by sending you text and email reminders before your payments are due.

If you choose the three-month payment schedule, you pay no interest. Choosing the six-month or 12-month schedule, you will typically pay an annual percentage rate of 15%. Affirm’s interest rates will never change from your initial agreement.

When you prequalify for an Affirm account, you know your exact purchase ceiling, although you do not have to use the full amount.

Where to learn more: Affirm website

Where to download the app: Google Play or the App Store

2. Afterpay

When you use Afterpay, you must make your first payment at the time of purchase, and you pay the rest over six weeks. Your spending limit gradually increases over time as long as you stay within your allowed budget and make your payments as scheduled.

Make Your Money Work for You

You also have the option of changing your payment date on the Afterpay website or mobile app by taking the following simple steps:

  1. Choose the order for which you want to change your payment date.
  2. Select a new date.
  3. Confirm your new date selection.

Afterpay has a hardship policy for customers who have trouble making repayments. If your circumstances change, you can choose to continue with your current payment plan or work with Afterpay to revise your plan to fit your current financial needs.

Where to learn more: Afterpay website

Where to download the app: Google Play or the App Store

3. Klarna

The Klarna app tailors your shopping experience to your preferences, whether online or in stores. You can join Klarna’s Vibe rewards club to unlock special deals. Membership is free, and you can earn one vibe for every dollar you spend. Vibes can be redeemed for rewards from participating retailers.

Klarna has several flexible payment options:

  • Split your payments into four installments every two weeks.
  • Pay in full within 30 days.
  • For larger purchases, get six-month to 36-month financing through Klarna’s bank partner, WebBank.

Where to learn more: Klarna website

Where to download the app: Google Play or the App Store

4. PayPal Pay in 4

PayPal is already a trusted name in online shopping, and its Pay in 4 feature allows you to pay for purchases in four total installments. Just like with Afterpay, you make a down payment at the time of purchase, and the remaining purchase price is split into three payments that are due every two weeks. Your purchases must be between $30 and $1,500, and you can pay directly through your PayPal wallet.

Pay in 4 is currently not available in all states. The late fees assessed also vary by state, so you should check the terms in your agreement closely when you choose this option at checkout.

Where to learn more: PayPal website

Where to download the app: Google Play or the App Store

5. Splitit

With Splitit, you use your existing credit card to pay in smaller installments. You don’t even have to apply to use this BNPL service, and there are no fees or interest.

Since you use your existing credit, you continue to earn any points and rewards associated with your credit card. Even using your credit card, your credit score is never affected with Splitit.

Where to learn more: Splitit website

Where to download the app: N/A

Benefits of Buy Now, Pay Later Apps

Millennial and Gen X shoppers are the two largest demographics using BNPL apps. Already strapped with student loan debt, many consumers have found BNPL apps to be the perfect tool to increase their spending power without going further into debt.

BNPL apps have become popular among consumers and retailers alike. Online shoppers continue to embrace this method of purchasing goods and services as an alternative to paying with credit cards.

Retailers find BNPL apps beneficial for business because the apps increase sales conversions, turning website visitors into paying customers. Online shoppers tend to use less of their existing credit nowadays, but BNPL apps are increasing online orders and decreasing shopping cart abandonment.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

About the Author

Kathy Evans is a personal finance freelance writer and entrepreneur with a technical writing and instructional systems design background. She holds an MS in technical writing and informational design and is currently a doctoral student in instructional technology at Towson University. Through work experience in the federal government as well as commercial and nonprofit industries, she has focused her freelance writing on finance, investing and economic content with a specialization in budget coaching.  

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