RESPONSIBLE LENDING
“ SOME OF OUR MEMBERS HAVE DESCRIBED AN EXPLOSION IN APPLICANTS WITH STACKED-UP BUY-NOW-PAY- LATER LOANS ”
THEODORA HADJIMICHAEL CEO , RESPONSIBLE FINANCE
She says that regulation for BNPL is “ long overdue ” and would improve both transparency and affordability , stopping people from getting into unsustainable levels of debt .
Todd Latham , CEO of technology platform Divido , believes there are steps that consumers can take to protect themselves against the perils of BNPL : “ It ' s important to remember that checkout finance is designed for large baskets and big-ticket transactions . It may seem tempting to use interest-free credit for small purchases , but these small loans can quickly add up and become unmanageable . If you are committed to a purchase and have the cash to pay for it there and then , it ' s usually better to choose this option .
“ This is especially true in situations where the lifespan of the loan could outlast the lifespan of the product , as in the case of using BNPL to pay for food and grocery shopping . In this way , you can stop yourself from ending up in a situation where you are managing multiple loans with different repayment terms , which can become confusing and increase the likelihood of missed repayments .”
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