![]() ![]() Some have been accused of running no credit checks at all, which is why some customers got the sense BNPL came with guaranteed approval.īut now, after increasing pressure from government regulation, lenders tend to run at least a soft credit check. ![]() Historically, some lenders have played fast-and-loose with their approach to credit checking. How do lenders vet their customers before offering Buy Now, Pay Later?Īs you can see in the above process, the customer will need to be approved by a lender before being eligible to finance their purchase through Buy Now, Pay Later. So, when you shop with a Divido lender, you’ll receive a quick decision about whether or not you have been approved – but there is no chance of ‘guaranteed approval’. In other words, they may be more likely to lend to customers with a lower credit score.Īt Divido, the lenders we work with have a robust system of credit checking in place to vet customers at the time of their application. To the best of our knowledge, there are no Buy Now, Pay Later providers who explicitly offer “guaranteed approval,” although some lenders have a higher appetite for risk than others. * Sometimes, the platform provider and the lender are the same entity.Īt the end of the day, it is the lender who provides the loan and is therefore responsible for making the decision about whether a customer will be approved. If all’s well, and the customer agrees to the lender’s terms and conditions, the lender will pay the retailer the cost of the basket, then collect repayments from the customer The lender will run a quick credit check on the customer to see if they qualify for finance. The lender is the company that finances the transaction.They give the customer the means to apply for finance, jot down their details, then pass them over to the lender to make a decision* The platform provider facilitates this process on behalf of the merchant.They advertise Buy Now, Pay Later as a way to pay at the checkout The merchant or retailer is the one selling and shipping the items.The customer is the one making the purchase.To help you visualise how a BNPL loan works, it’s important to understand there are up to four parties involved in every Buy Now, Pay Later transaction: Make no mistake: these are genuine credit products that could impact your credit rating. Whatever they prefer to call it, these offers all have one thing in common: they are loans designed to help you fund the cost of your shopping, with repayments made in weekly or monthly instalments. ![]() Others offer to let you ‘split the cost’ or ‘pay in three/four/etc.’ If you’re purchasing a high-value item, you may be offered Short-term Interest-free-Credit. Some will refer to their products as ‘checkout finance’ or ‘retail finance’. So, when you get to the checkout of your favourite shop or ecommerce store, you may find several providers waiting to offer you Buy Now, Pay Later. ![]() There are a great number of Buy Now, Pay Later providers in the world. To explain why this is the case, let’s run through how BNPL works and why Buy Now, Pay Later loans with guaranteed approval may be too good to be true.Ĭan you get guaranteed approval with Buy Now, Pay Later? No two words put us more on edge than “guaranteed approval.” So, let’s nip this in the bud: it’s not impossible to get guaranteed approval when you shop with checkout finance, but you should be wary of anyone offering to provide Buy Now, Pay Later (BNPL) with guaranteed approval. ![]()
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