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Many high-ticket products such as furniture items and electronics can be purchased using in-store financing. But with Buy Now, Pay Later (BNPL) options, you can essentially finance these big-ticket items as well as smaller items in four to six installments without having to pay any interest.
Unfortunately, as convenient as a BNPL option may be, it’s still another bill to add to the list. These payments can also become hard to manage when you use the short-term interest-free option to finance a big cost. If you’re having trouble paying off your BNPL, you may be wondering if you can use a personal loan with a longer term to help you cover your BNPL debt and make your payments more affordable.
Let’s take a closer look at how you might be able to use the funds from a personal loan to pay off your BNPL loan.
You may be able to use a personal loan to pay off your BNPL loan, but it depends on the payment method accepted by the BNPL company. Each provider has its own specific regulations.
For instance, PayBright, which allows consumers to break down their payments into regular installments, only accepts credit cards as a method of payment. In this case, you could technically use the funds from a personal loan to pay off your BNPL. To do so, you would use the personal loan funds to pay off your credit card debt, which would indirectly pay your BNPL from PayBright.
If the BNPL provider accepts direct debits, then you may use your personal loan funds to pay off your BNPL by having the money deposited into the same account that your BNPL loan payments are being debited from.
When you take out a personal loan, you can essentially use the borrowed funds in any way you please, including to pay off other bills, such as your BNPL loan. Here are a couple of ways to use your personal loan funds to pay off your BNPL loan depending on the accepted payment method:
As mentioned earlier, you can use the money from your personal loan to pay off your credit card balance. If you use your credit card to make your regular BNPL payments each billing period, you can indirectly pay off your BNPL by using the personal loan funds to cover the outstanding balance on your credit card.
If your BNPL payments are automatically debited from your bank account, you can have the funds from your personal loan deposited into the same account, which would effectively cover the BNPL payments being deducted. You can either pay off each BNPL installment payment as they are debited, or pay the entire balance in full (if the BNPL provider allows it).
As noted earlier, your ability to use a personal loan to pay off your BNPL loan depends on the payment methods accepted by the specific company. Let’s go over a few BNPL providers to see how each accepts payment, as well as whether or not there will be a prepayment penalty for paying off your loan early.
PayBright allows you to break down the cost of a big purchase into 4 installments, known as the “Pay in 4” payment plan. The first payment will be authorized on the day of the purchase, and the remaining payments will start on a bi-weekly basis following the first payment.
Ultimately, the methods of payment available to pay off your PayBright BNPL loan are determined by the retailer. PayBright’s accepted methods of payment are as follows:
If you have the money to pay off the balance before the last payment is due, you’re free to repay it in full without having to worry about being charged any early prepayment penalty fees.
Simply log into your PayBright account and choose the plan you want to pay off. You can pay it off in part or in whole, depending on your situation. The money you obtain from your personal loan can be applied to your PayBright BNPL loan to pay it off early, with no penalties for early repayment.
Sezzle is another convenient BNPL payment system that allows you to break down a large payment into smaller payments. More specifically, your purchase will be paid out over 4 installment payments within a 6-week period, at 0% interest.
The first installment must be paid via credit card, while payments 2, 3, and 4 can be paid with your credit card or a withdrawal from your bank account.
Wight Sezzle, you also have the option to pay your entire debt off early without incurring any late charges. To do so, simply login to your Sezzle account, navigate to the specific order, and click “Pay Now.” You can then choose the payment method you’d like to use.
While you can only use a credit card, bank account, or prepaid card to pay off your purchase in full, you can use the funds from a personal loan to pay off your credit card or prepaid card bill. Or you can use them to replace the debited funds from your bank account to make the Sezzle payment.
Like PayBright and Sezzle, AfterPay is a BNPL platform that allows you to shop now and pay for your items later over a series of installment payments. More specifically, you’ll make the first payment at the time of checkout, then make the remaining 3 payments over the course of 6 weeks. No interest or fees are applied if your payments are made on time.
AfterPay accepts debit and credit cards as forms of payment. You can choose to have your payments automatically credited to your card, or you can manually make the payments yourself at each billing period.
You have the option to pay off your installments early after the order is placed, with no prepayment fees applied. You can do this by visiting your Sezzle account and selecting the “Pay Now” button to pay off your balance in full with your preferred payment method.
As mentioned before, you can take out a personal loan and apply the funds towards your BNPL debt by either paying off your credit card from which payments are credited or by depositing the personal loan funds in your bank account from which payments are debited.
There are a handful of perks to taking out a personal loan and using the funds to pay off your BNPL loan early, but there are also a couple of drawbacks that should also be considered.
What is a BNPL?
Do BNPL loans charge interest?
Can I prepay my BNPL?
Personal loans are very flexible when it comes to how you use the money you borrow. And one way you might choose to use these funds is by paying off your BNPL loan early before it’s due in full. That way, you can scratch one more bill off your list, and potentially pay off other debt you might currently have.
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