CFPB - Consumer Financial Protection Bureau
01/13/2025 | Press release | Distributed by Public on 01/13/2025 10:57
Consumer Use of Buy Now, Pay Later and Other Unsecured Debt
Buy Now, Pay Later (BNPL) loans, generally defined as zero-interest loans repaid in four or fewer installments ("pay-in-four" loans), have grown rapidly in the United States (U.S.) since 2019. Lenders have typically not reported BNPL loans to the nationwide consumer reporting companies. As a result, the loans have not appeared in credit records in large enough volumes for external observers to measure key statistics relevant to consumers in this market, including overall persistence in use, loan stacking across firms and total unsecured consumer debt balances. This study overcomes this data gap by using a matched sample of BNPL applications and originations for pay-in-four loans from six large BNPL firms (Affirm, Afterpay, Klarna, PayPal, Sezzle, and Zip) with their corresponding de-identified credit records.