BNPL credit facility used without caution can lead to a debt trap

Understand all the attendant costs of this facility; delayed repayment will hit your credit score

Buy now pay later (BNPL) has been gaining traction in India. According to a Kotak Institutional Equities report, BNPL providers extended over 4 million lines of credit to customers in the fourth quarter of calendar year 2021. Customers using this relatively new form of credit must, however, exercise caution, especially if they are themselves new to credit.

Easy access to credit

One reason for BNPL’s growing popularity is easy access. Onboarding is digital and usually seamless, with very few documents asked for. Getting a personal loan or credit card requires more documents and is usually more time consuming, especially in