CHOICE membership

Do you use 'buy now, pay later' such as Afterpay or Zip?

Do you use buy now, pay later (Afterpay, Zip, Humm etc.) and have you been asked about it during a home loan application? What did your bank say and what happened next?

Continuing our earlier discussions and consumer consultations in this area, I’m working on an article for CHOICE and would like to hear your thoughts. Drop me a DM or email jblakkarly@choice.com.au to share your story.

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Short answer is no, I’ve never used any of them, but see them promoted all the time when purchasing items online, even things for under $10!

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No I don’t use them but PayPal has numerous pop ups when making purchasers to promote it .

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No luck with me either. Don’t use them and never plan to do so.

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Likewise no, and no intention. If I dont have the reserves to get whatever it is, I dont get it. simple.

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Yes, I do, I find that I can manage the payment schedule, the most I have put on afterpay is $400.00. I wouldn’t be able to afford anymore. I think if you know your limit it can be a good thing. I don’t use a credit card so I find using afterpay is a safer way to buy goods, at least you know your boundries.

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No, mostly offered though, even for very small amounts.

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I have heard of one called before pay. Im slightly confused how it works. I can only say that they mention about receiving pay faster but thry charge for service. Ill stick to using the bank. I wonder how many people would pay to allow some one else to access money quickly

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No. I understand this might suit some people but I prefer to buy what I can afford now and save for what I can’t. Exception: mortgage :slight_smile:

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This is like a payday loan service not a buy now pay later scheme. Both types of loaning do not have as much regulation as other credit provision, which is a dangerous situation for those who cannot manage their finances effectively and those of limited means.

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I can’t say i really like that idea one bit ill stick to the bank any day. Non bank lenders are no good. I have no idea why they bothered having a royal commission intp banking when shoddy providers are around

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The need for political window dressing was forced on them.

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Why is that? what do they do wrong? How do you know?

And yet the RC found plenty for the banks to answer for, their ‘indiscretions’ cost the consumer billions. Our fearless leaders have attempted to water it down as much as possible but that is another story.

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With many consumers on low or zero incomes, as far as banks are concerned, Afterpay etc may be the next best option.

For those who are retired, self funded or pension, experiences seem to vary between institution and circumstance.

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If applying for a loan banks i found are, strict unless can prove you can show are earning income i found that out when wanting to refinance amd I couldn’t do it. Everywhere else advertise we will give money out in minutes. Im no financial expert at all jist what i hear and see.

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Payday loans and Buy Now, Pay Later have far, far higher charges than banks although Government legislation limited their interest rates it can still be as high as 45% (perhaps 49%, I can’t recall exactly) and these two types are not required at all to look into whether a client can service the payments, so there are people who can have multiple loans through different providers. While some disciplined people have no issues with them, these sorts of services really attract people who are already struggling financially, often borrowing to cover other debts they can’t service. A missed payment either has interest added or an ‘administration fee’ and can result in a person borrowing a very small amount and owing hundreds in months, and if they borrow something larger, it can end up being thousands. Much the same way people who only pay off the minimum credit card amount end up owing a lot more money.

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No, nor would I recommend them unless you’re really disciplined. I posted a reply further down which might explain why Banks would enquire about payday loans or buy now, pay later loans, during a home loan application. I’m guessing, if a client takes out a buy now, pay later kind of loan, it might indicate either poor money management habits (if they miss payments and have fees added) or a disciplined budgeter who always pays on time? I don’t know.

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Yes they do but we are getting into the area of not comparing like with like by generalising too much. Lending is done for many different purposes and in different amounts so it isn’t fair to try to compare them all together.

For example non-bank lenders includes building societies that are popular with many people who say they give better service and in some cases cheaper rates than banks. Even the banks will give much different service and rates to different people for different purposes.

None of this has me supporting BNPL or payday loan sharks who prey on the weakest members of society and help themselves not their customers more than other categories do.

No!! Thankfully l was brought up in an era where “if you don’t have the money…you don’t need it”. This applied in many instances growing up and it didn’t do me any harm. BUT when it came to buying a house (Back in the 70s)…it was a daunting task o borrow $14000!!!

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No I have not used any form of afterpay (other than a credit card) nor would I ever. I always pay my credit card off at the end of the month as well so I have never paid interest anyway.

My biggest concern with these afterpay options is that there is no credit checking going on e.g. does the person want afterpay because they have maxed out multiple credit cards?, no checking how many of these services an individual has signed up to or whether the individual can afford repayments even over 4 weeks. And the fact that just about any purchase these days offers afterpay regardless of the actual amount of the purchase is a cause for concern.

And when you now consider the push for ‘before pay’ which is simply an advance on your salary though not from your employer (and for which you pay a fee on top) this whole ’ business’ is geared to enticing more people into spending money they just don’t have. We already hear stories of people getting into trouble and then blaming everyone but themselves. The truth is, these so called ’ free money’ services are anything but and most people using them are not just trying to feed/clothe their families or pay bills on a low income. Look at the ads, they are all about discretionary spending feeding the ‘I want what I want and I want it NOW’! attitude so prevalent these days.

Like many have said here, if you can’t pay for the item, you can’t afford it - and that goes for not paying off the credit card in full each month.

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