What happens if you buy now, but can’t pay PayPal later?

Buy now, pay later (BNPL) services are gaining popularity due to their easy access and flexible repayment options. BNPL is highly appealing as it lets you spread the cost of a purchase, rather than making an upfront payment that could seriously squeeze household finances.

PayPal, along with Klarna and Clearpay are household names in the short-term financing arena. They offer a Pay in 3 option which splits the cost of purchases between £30 and £2,000 into three interest-free instalments over a two-month period.

When applying for Pay in 3, a soft-credit check is performed. While it doesn’t affect your credit score, your access to PayPal Pay in 3 will be visible to other lenders which could affect your ability to borrow money, and the terms offered.

PayPal credit is also an option which is a digital credit card that offers 0% interest over 4 months for each purchase of £99 or more. This credit option is designed for bigger purchases and grants a longer borrowing window, which stands out from other buy now, pay later providers.

While PayPal credit can help split the cost of high-value purchases, the risk is greater if you can’t afford to keep up with payments.

What happens if you have a debt with PayPal?

Buy now, pay later options give you the financial capability to make purchases without delay which can trigger your borrowing to spiral out of control.

You may be contacted by PayPal to discuss repayments if your payments are overdue.

If you ignore your PayPal Pay in 3 or PayPal credit debts, this could affect your future eligibility for PayPal finance and other forms of credit. PayPal may limit your account, lock your account, impose fees, report the debt to a credit agency and/or refer the debt to a debt collection agency.

Note that a £12 late payment fee will be issued for PayPal Credit, and repayments cannot be made via a credit card.

If you can’t afford your PayPal Pay in 3 or PayPal credit payments, what happens?

What should you do if you are in debt to PayPal?

If you need financial help as you can’t afford your PayPal payments, get in touch with PayPal.

Payment Holiday Program – PayPal offers a free payment holiday for a month, per loan, to those experiencing short-term financial hardship.

To qualify, you must have no history of overdue payments with PayPal and you must not be currently enrolled onto another hardship programme. Additional circumstances and your ability to make repayments over the long term will also be considered.

Seek professional support from debt counsellors

If you cannot reach an amicable payment agreement with PayPal, seek help from a professional debt advisor or debt charity. They can explore the range of options available to help you financially survive and seek a long-term solution for your debt problems.

Get expert debt advice

If you have debts through buy now, pay later schemes you can’t afford to maintain, seek professional help immediately. Our specialist debt advisers can bring your debts under control by advising on debt solutions that can reduce your monthly payments and potentially write off a proportion of your debts. If you have personal debts of £5,000 or more, we can help.

Contact the Scotland Debt Solution team for a free, same-day consultation or arrange a home visit with one of our debt advisers.