*Apple is now giving customers the option to buy now and pay later with its Apple Pay Later program.
Here’s how it works: Apple Pay users can split purchases into four interest-free payments paid over six weeks with no late fees.
“Users can apply for Apple Pay Later loans of $50 to $1,000, which can be used for online and in-app purchases made on iPhone and iPad with merchants that accept Apple Pay.3 Starting today, Apple will begin inviting select users to access a prerelease version of Apple Pay Later, with plans to offer it to all eligible users in the coming months,” per the company’s press release.
“There’s no one-size-fits-all approach when it comes to how people manage their finances. Many people are looking for flexible payment options, which is why we’re excited to provide our users with Apple Pay Later,” said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet.
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Apple Pay Later has started rolling out in the US to invited users ????
Would you use this? pic.twitter.com/RTT8jPCLlT
— Apple Hub (@theapplehub) March 28, 2023
“Apple Pay Later was designed with our users’ financial health in mind, so it has no fees and no interest, and can be used and managed within Wallet, making it easier for consumers to make informed and responsible borrowing decisions,” Bailey continued.
Apple conducts a soft credit check to ensure you’re in a “good financial position” before receiving the loan, according to the press release. This process won’t impact your credit score. You’ll need to link a debit card to your Apple Wallet that will be used to replay the loan.
Here’s how Apple Pay Later compares to other micro-loan services via CNBC:
Apple Pay Later
- Interest rate: 0%
- Payback timeframe: 4 payments over 6 weeks
- Loan amount limit: $50 to $1,000
- Fees: $0
Affirm
- Interest rate: 0% to 36%
- Payback timeframe: 1 to 48 months
- Loan amount limit: Up to $25,000
- Fees: No late fees. However, a late payment could negatively impact your ability to get a loan in the future and possibly hurt your credit score.
- Worth knowing: Affirm’s “Pay in 4” option allows users to divide their purchase into four interest-free payments made every two weeks. This option does not charge late fees.
Afterpay
- Interest rate: 0%
- Payback timeframe: 4 payments over 6 weeks
- Loan amount limit: Variable, but increases the more you use Afterpay. A long-term user will typically have access to more funds than a new user.
- Fees: Late fee of $8 or 25% of the transaction, which ever is less
Klarna
- Interest rate: 0% to 29.99%
- Payback timeframe: Up to 24 months
- Loan amount limit: Variable and is based on factors such as your payment history with Klarna and your outstanding balance.
- Fees: Up to $7 or 25% of the installment amount. Additionally, use of Klarna’s services are restricted until the missed payments are made.
- Worth knowing: Klarna’s “Pay in 4” option allows users to divide their purchase into four interest-free payments made every two weeks. Late fees for this option are the lesser of $7 or 25% of the installment amount, and services are restricted until missed payments are made.
PayPal’s “Pay in 4”
- Interest rate: 0%
- Payback timeframe: 4 payments over 6 weeks; first payment is due at time of purchase
- Loan amount limit: Between $30 and $1,500
- Fees: $0. However, a late payment could negatively impact your ability to get a loan in the future and possibly hurt your credit score.
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