It’s no secret, consumers love the ‘buy now, pay later’ option. In recent years this purchasing option has grown from 400,000 users in 2015, to over 2 million Australians utilising this method in 2020. Being able to get what you’re after immediately, while paying it off over time, almost seems like a deal that is too good to be true. Well, if not used efficiently, sometimes it is.
When looking for a loan, what could seem like an innocent way to get what you’re after instantly, can cause you issues in the future.
Consumers tend to get caught up in the freedom that comes with this buying option, and often end up loading their account with more instalments then they can actually afford. This can lead to a situation where you are not able to afford the repayments. And if you can’t keep up your repayments, this can affect your credit report and ultimately, your future loan applications.
In addition, lenders often look at your bank statements before accepting an application. If a lender sees a ‘buy now pay later’ provider frequently on your statements, it may lead to more questions about your spending behaviours and hinder your application.
It’s important to appropriately manage your expenses well in advance of applying for a home loan – this way you can show the bank that you can save and afford to service a mortgage when the time comes.
If you have any questions, need help or some friendly advice about your loan application (including what you can be doing now to increase your chances of getting a loan in the future), get in contact with us – we would love to help.