The real cost of buy now, pay later
More than 2 million Australians are making use of buy now, pay later (BNPL) services through retailers online and in-store. Whilst these services are making it easier for Australians to buy stuff, there are hidden and lasting costs to this practice.
With lenders scrutinising spending habits more than ever before, the use of this payment option can have a very real impact on any future loan application. This is because many BNPL providers don’t check your ability to repay, or your credit history. This means you could end up with credit you can’t afford and have trouble repaying.
That’s why many lenders including some of the major banks now require all BNPL loans to be disclosed when going for a home loan. Your bank statements will show if you’re a regular user of these services and you may need to clear these debts before a home loan is approved.
So, if you are thinking of applying for a home loan in the near future, you may need to budget or forward plan your purchases to avoid relying on BNPL services. Also, keep track of your BNPL commitments and make sure you make them.
To learn more about how using buy now, pay later services could impact your mortgage application, contact us on: contact@ovmfinance.com.au