Buy Now, Pay Later (BNPL) vs Personal Loans – Which is Better?

Factor	BNPL	Personal Loan
Purpose	Small, instant purchases	Medium-to-large expenses
Loan Amount	₹1,000 to ₹50,000 (approx.)	₹5,000 to ₹20+ lakhs
Repayment Tenure	15 days to 6 months	6 months to 5 years
Interest	Usually 0% (short term)	10% to 24% p.a.
Documentation	Minimal or none	PAN, Aadhaar, salary slips, bank statements
Credit Check	Often not required	Mandatory
Impact on Credit Score	May not report to credit bureaus	Reported monthly
Availability	At checkout on select platforms	Via loan apps or banks

Which One is Cheaper?

BNPL seems cheaper because it often comes with 0% interest for short durations. But missing a payment can lead to: – Late fees – Interest on overdue amount – Account suspension

Personal loans come with fixed interest and clear repayment schedules. You always know what you owe and when.

If you plan to repay over 6+ months or borrow more than ₹5000, a personal loan is more predictable and safer long term.

Which is Easier to Get?

BNPL is extremely easy to access: – Available instantly at checkout – No need to submit documents or undergo credit checks

Personal loans take more effort: – Requires income verification, credit checks – Approval time can vary from a few hours to 1-2 days

That said, once you’re approved for a personal loan, the amount is credited directly to your account and can be used for anything — not just one purchase.

Impact on Your Credit Score

BNPL:

Some providers don’t report repayment to credit bureaus. So, paying on time may not improve your credit score. However, defaults can impact your credit file.

Personal Loans:

Always reported. Timely repayments can help build your credit profile. But missed payments will lower your score.

If you’re building or improving your credit, personal loans are the better option.

Learn how to improve your credit score for faster loan approval.

Repayment Flexibility & Tenure

BNPL: – Tenure usually fixed (3 to 6 EMIs) – No prepayment options – Less flexibility on due dates

Personal Loans: – Flexible tenure from 6 months to 60 months – Can repay early (may include prepayment charges) – EMIs can be auto-debited on chosen date

If you need repayment flexibility or want to reduce EMI burden, personal loans offer more control.

When Should You Choose BNPL?

Go for BNPL if: – You’re making a small-ticket purchase (< ₹5000) – The merchant offers 0% interest – You can repay in 1-3 months easily – You don’t want to go through a loan approval process

BNPL works well for: – Gadgets – Fashion & lifestyle – Short trips – Booking tickets

When Should You Choose a Personal Loan?

Choose a personal loan if: – You need ₹5000 or more – Your repayment timeline is longer than 6 months – You want to improve your credit profile – You need funds for multiple or urgent purposes

Personal loans are ideal for: – Medical emergencies – Home repairs – Higher education – Weddings or relocation

You can even opt for an Advance Salary Loan if you need funds before payday.

Choose Based on Need, Not Just Convenience

BNPL is great for quick, small payments without documentation. But it doesn’t offer flexibility or credit-building benefits.

Personal loans, though slightly harder to get, offer larger amounts, longer tenures, and financial discipline.

Make your choice based on: – Loan amount you need – Repayment capacity – Credit goals – Long-term affordability

Looking for a trusted personal loan provider?

LoanTap offers personal loans from ₹5000 up to ₹10,00,000 with flexible tenures, minimal documentation, and fast disbursals.

Apply online in minutes and get access to funds tailored to your needs.

FAQs

Q1. Is BNPL a loan?

Yes, BNPL is a form of short-term credit that lets you defer payments. However, it usually doesn’t require formal loan documentation or credit checks.

Q2. Does BNPL affect your credit score?

Only if the provider reports it. Many BNPL services do not report positive repayment history but may report defaults.

Q3. Are personal loans better for long-term borrowing?

Yes. Personal loans come with fixed tenures and EMIs, making them more suitable for long-term financial planning.

Q4. Can I prepay a BNPL plan?

Most BNPL providers don’t allow early closure or prepayment. You must stick to the EMI schedule.

Q5. Is LoanTap a BNPL provider?

No. LoanTap provides personal loans, including products like Advance Salary Loans, EMI-free loans, and more — not BNPL services.