Buy Now Pay Later Vacation Loans: Are They Worth It?

With the rising gas, hotel stays, and food prices, how exactly are Americans paying for their long-awaited trip?

One option increasing in popularity is Buy Now Pay Later (BNPL) financing. These loans can be applied for online during checkout and approved within minutes, and most BNPL loans require little to no money down and are paid back in installments.

While BNPL loans may sound like a great way to pay for your flight or all-inclusive resort, you’ll want to weigh the financial risks before applying.

Risks to Consider Before Using BNPL

Interest: Some BNPL loan providers like Afterpay and Klarna are interest and fee-free as long as payments are on-time, but some are not.

Affirm offers rates between 0% – 30% APR depending on your credit, while Uplift ranges from 0% – 36% APR.

Refunds: Before using a BNPL loan to book your bachelorette party in Las Vegas, understand the refund policy. If your flight is canceled and you aren’t eligible for a refund through the airline, you may still be responsible for your loan payments.

Late Fees: Lenders who offer interest-free loans sometimes have late fee penalties. So if you have a poor payment history, this loan option could get you into trouble.

Multiple Loans: According to a recent survey, individuals who use BNPL loans once are more likely to use them again. Taking out more than one loan simultaneously, also known as stacking, can quickly become unmanageable when payments are due.

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