Like other BNPL services, Laybuy lets customers spread out the payment of their purchases over a few weeks without incurring interest. If you purchase something using.
When using Laybuy as your payment method, you will pay a sixth of the total amount at the time of purchase and the remaining amount will be taken out in five equal weekly installments from your linked card. As an example, if you decide to buy a pair of shoes worth $120. Paying with Laybuy entails paying $20 on the day of purchase and an additional $20 each week for the following five weeks.
Laybuy asserts that it pays every merchant within 48 hours of the transaction and takes on all credit and fraud risk. Laybuy also boasts of multinational capabilities that can handle foreign exchange fees for retailers.
The Lowdown on Laybuy and Your Credit Score
So you’re considering using Laybuy, the popular “Buy Now, Pay Later” (BNPL) service, to snag that new pair of shoes or upgrade your tech? Before you click “confirm” let’s dive into the nitty-gritty of how Laybuy can impact your credit score.
The Laybuy Lowdown:
Laybuy lets you split your purchase into six equal interest-free weekly payments. Sounds tempting, right? But there’s a catch: Laybuy performs a hard credit check on your Experian credit report when you apply for an account regardless of whether you’re approved or not. This can temporarily lower your credit score.
The Credit Score Impact:
Here’s the deal: if you use Laybuy responsibly and make your payments on time, your credit score shouldn’t be negatively affected. In fact, it could even improve over time, especially if you have a limited credit history.
However, if you miss payments or default on your Laybuy account, the company may report this to credit reference agencies (CRAs), which can damage your credit score. This negative mark can stay on your credit report for up to six years, making it harder to get approved for loans or credit cards in the future.
Laybuy’s Credit Score Impact in a Nutshell:
- On-time payments: Boosts your credit score.
- Missed payments: Damages your credit score.
- Multiple BNPL accounts: Can negatively impact your credit score.
- Hard credit check: Temporarily lowers your credit score.
Laybuy’s Tips for Responsible Use:
- Create a budget: Track your income and expenses to ensure you can afford your Laybuy payments.
- Plan ahead: Only use Laybuy for purchases you can realistically afford.
- Keep track of your spending: Monitor your Laybuy account dashboard to stay on top of your payments.
The Bottom Line:
Laybuy can be a convenient way to spread out your payments, but it’s crucial to use it responsibly to avoid damaging your credit score. Remember, on-time payments are key to maintaining a healthy credit score, while missed payments can lead to a negative impact.
FAQs:
- Does Laybuy perform a credit check? Yes, Laybuy performs a hard credit check on new account applications.
- Do I get a credit limit with Laybuy? Yes, Laybuy assigns you a credit limit, which is reviewed every two to three months.
- Can anyone get Laybuy? To be eligible for a Laybuy account, you must be at least 18 years old, have a verifiable email address and mobile number, and possess a valid credit or debit card.
- How will Laybuy affect my credit score? If you manage your Laybuy account responsibly and make your payments on time, your credit score shouldn’t be negatively affected. However, missed payments or defaults can damage your credit score.
How much can I spend with Laybuy?
With Laybuy, you can spend a minimum of $120 and a maximum of $1,200. However, your approved limit may be less than $1,200 when you sign up on the platform. Laybuy decides your transaction limit according to various factors, such as your credit history and credit score.
You can pay the difference in amount upfront if you want to buy something over your authorized limit. For example, let’s say you wish to purchase $1,400 through Laybuy and your available limit is $1,000. In this instance, you will have an upfront $400 Laybuy payment, and you will make $200 weekly repayments.
Laybuy fees and charges
Like most BNPL platforms, Laybuy repayments are entirely interest-free. You don’t pay any additional fees or charges when you make your repayments on time. However, if an installment payment fails, it will be retried in a day; however, if it fails once more, you will be charged a $10 late payment fee.
If the instalment remains unpaid for another seven days, another fee will be applied. Nevertheless, there is a $20 maximum late fee for each missed installment, and a $40 maximum late penalty for each purchase you make.
Laybuy gives you the flexibility to choose your repayment schedule. While purchasing something, you can select your payment day to make your weekly payments comfortably. However, you won’t be able to alter your repayment dates once you’ve chosen your payment plan and finished the order.