Why is BNPL popular, and what users often overlook?

Subscribe to enjoy similar stories.A quiet shift is underway in how India spends, as salaries fail to keep pace with the rising cost of living.An April 2026 white paper titled The New Indian Household Balance Sheet by wealth manager Client Associates found that net financial savings have fallen sharply to about 5.2% of gross domestic product in 2023-24, down from nearly 7.7% in the pre-pandemic years, as rising borrowings eat into household surpluses and household financial liabilities have climbed to 6.2% of GDP, a decade high, driven by rapid growth in home loans, personal credit, and credit card spending.And somewhere in between wanting something and not being able to afford it, a new habit has taken hold: buy now and pay later (BNPL).BNPL is a type of short-term loan that lets you pay for goods or services immediately and pay them back at a later date, usually in instalments or with a single interest-free deferred payment. Unlike conventional loans, it is largely interest-free as long as the customer pays on time.

The cost, however, doesn't disappear; it shifts.“Instead of offering a discount, the merchant absorbs the interest and processing fees on behalf of the customer,” said Jagadeesh Mohan, founder of EMI Saver. “It protects their brand value while also opening up a segment of buyers who couldn't otherwise afford the product—people driven by aspiration or impulse.”You can either sign up on an app or opt for it during checkout on e-commerce platforms.

This is offered by platforms such as LazyPay, Mobikwik, and even e-commerce apps such as Amazon and Flipkart through their Pay Later feature. The system checks your creditworthiness and upon approval, you receive a pre-approved credit limit, which you can use for a