Power tools can be expensive, yet a necessity if you own a home. If you don’t want to rack up credit card debt but need the tools now, you may consider a buy now pay later power tools plan.
It’s similar to layaway, except rather than waiting until you pay for the purchase in full, you get the product at checkout. It can be a great way to get the tools you need now and pay for them over time.
Before you accept a buy now pay later plan for power tools, though, you should know how they work, what to look for, and the pros/cons.
What Does Buy Now Pay Later Mean?
Buy now pay later means you buy the product now like you would if you were paying cash. You take the product with you, but you pay for it over time. Most plans require equal installment payments over 4 payments, with the first occurring at checkout, but there are variations.
The biggest takeaway with buy now pay later plans, though, is that you get possession of the tool today. You take it home and can use it all you want. As long as you make your payments on time, there’s no interest or fees either. It’s a more affordable way to get what you need.
How Does Buy Now Pay Later Power Tools Work?
When you use the buy now pay later power tools plan, you apply with a company such as Affirm or Klarna. The application process takes only a few seconds, and you’ll have an answer instantly.
You don’t need great credit or special qualifying factors either. If you’re approved, you make an initial payment at checkout, which is usually 25% of the purchase price. You’ll then make equal payments every 2 weeks over the next 6 weeks. This pays the power tools off in 4 payments but gave you possession almost 2 months ago.
Some plans also offer longer terms, which can help if the power tools are more expensive. If you can’t pay it off in 4 payments, you may apply for terms of up to 12 or 24 months depending on the company and the cost.
If you spread the payments out beyond 4 payments, you’ll pay interest and fees if you make a payment late.
The Pay in 4 Plan, however, doesn’t charge interest. When you accept the plan, you’ll provide your debit or credit card information. The company will automatically charge your payment every 2 weeks to the card, so it’s important to make sure you can afford the required payments every 2 weeks to avoid paying interest or fees.
How to Find the Best Buy Now Pay Later Power Tools Plan
Before you accept any buy now pay later power tools plan, you should know what to look for:
- Fees – Typical BNPL plans don’t charge fees. If you take the Pay in 4 Plan, you just split the cost into 4 equal payments with no extra fees. If you spread it out over a longer period, you may incur fees, though, so read the fine print.
- Interest – Just like the fees, BNPL plans don’t charge interest if you make the payments over 4 equal installments. If you spread the payments out over a longer installment plan, though, there will be interest charges. Find out the full cost of the contract before accepting it.
- Payment requirements – Most BNPL plans require equal installment payments of 25% of the cost of the tools every 2 weeks. Every company works differently though, so make sure you understand the payment terms.
What are the Advantages of Buy Now Pay Later Power Tools?
Buy now pay later power tools offers many benefits including:
- You may not pay interest or fees. You can split the cost into quarters and pay it off over a couple of months but take possession of the tools right away.
- You’ll get a decision instantly, and you don’t need great credit or a certain amount of money to qualify.
- You don’t have to rack up credit card debt, hurt your credit score, or pay excessive interest rates to take the tools now.
What are the Disadvantages of Buy Now Pay Later Power Tools?
Like any purchase decision, there are downsides to buy now pay later power tools. Here’s what to consider:
- It’s easy to buy more than you need or to buy a more expensive brand because you can pay it off over time. Stick to your budget and don’t buy more than you need.
- If you miss a payment, you could pay excessive fees or interest.
- If you don’t keep track of the buy now pay later plans you’ve taken, you could get in over your head in debt, just like you could with a credit card.
Buy now pay later power tools can be a great way to get the tools you need now without breaking the bank. Watch how much you spend, only buy the brand and type you need, and make sure the payments fit within your budget.
Even though the plan makes the tools seem much more affordable, they cost the same amount, so stick to your budget and only buy what you can afford and make sure you use a reputable buy now pay later company.