The difference between buy now, pay later and a personal loan


The ‘buy now, pay later’ option, aka BNPL, offers customers the convenience of payments for essential purchases as well as a 15-30 day cushion for refunds without worrying about salary irregularities.

Due to the emergence of digital infrastructure, the growth of the e-commerce industry, the increase in online shoppers, the increase in digital payments and the convenience and accessibility offered by short-term credit, India is already riding this new BNPL wave.

Here’s how BNPL differs from a personal loan:

Amount of the loan

According to Vivek Veda, co-founder and CFO of KreditBee and co-founder of FACE (Fintech Association for Consumer Empowerment), personal loans are the financing option of choice for people facing an emergency financial crisis.

“It’s the best bet if customers want to borrow more than 1,000,000 rupees,” Veda says.

A BNPL payment method, Veda suggests, can be chosen when customers demand an amount less than Rs a lakh. For BNPL, the account can be created quickly and the money is accessible within minutes.


A personal loan may require certain documents while BNPL does not require any documents.

According to Veda, this allowed consumers to buy and delay payment for 14-30 days or repay the amount in installments.

“BNPL only performs a gentle credit history check. The simplicity with which one can apply and access BNPL gives a lot of flexibility to the user, thus increasing their purchasing power,” explains Veda.


Generally, according to Veda, one reason to apply for a personal loan can be to achieve various financial goals such as marriage, education, home improvement, vacations, etc.

On the other hand, using BNPL is convenient to buy products like food, clothes, personal care items, smartphones, refrigerators, etc.

Interest rate

The interest rate for a personal loan is fixed. While it differs a lot when it comes to BNPL.

“There is no interest or charge taken on amounts ranging from Rs 5,000 to Rs 25,000, and the payback period is between 15 and 45 days. Interest is charged on credit limits ranging from Rs 25,000 to Rs 1,000,000, with repayment cycles ranging from one to three months, ”says Veda.


While a personal loan typically ranges from 12 to 84 months, BNPL is a short term loan that can range from 15 days to 3 months.

What is better?

According to Veda, financial goals should determine whether one should choose BNPL or a personal loan.

“Personal loans should be opted for when customers need a larger loan, and BNPL is a good source of credit for small items,” he suggests.

Warning: The opinions and investment advice expressed by the investment experts on are theirs and not those of the website or its management. advises users to consult with certified experts before making any investment decisions.


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