Getting to know personal loans and BNPL

If you’re eyeing a special purchase or project but prefer not to pay upfront, a personal loan or buy now, pay later (BNPL ) service could fit your needs.

With both offering fast access to funds, it’s important to understand the differences and how they could work with your plans.

To help you make an informed decision, here are some questions to ask.

What are the costs?

BNPL options allow you to purchase the things you want now and then pay in instalments without interest. Keep in mind that BNPL can be difficult to track when you make several purchases, and late fees and interest rates can apply for delayed repayments.

Personal loans often have up-front fees attached such as origination and application fees. However, they offer a predictable repayment structure which can give you a clear understanding of the overall cost and interest included.

What are the spending limits?

When using a BNPL service, there are often restrictions on what you can purchase and where you can purchase from within your set account limit.

Personal loans are a versatile and flexible option for borrowers. With access to a pool of funds, the uses range from debt consolidation to home improvements and travel plans. Typically, personal loans also offer a higher limit.

What's the application process?

Applying for a BNPL service is usually a simple online process which could see your application approved instantly, depending on the platform.

Personal loans are also available through online applications with fast approval times. Depending on your circumstances, some lenders like Liberty even offer same-day funding.

Who can provide support?

If you’re weighing up your options, getting advice can be a smart step. Consider speaking with a lending expert such as a Liberty Adviser to find out more about personal loans.

For support to turn your grand ideas into reality, reach out to your local Liberty Adviser today.