PayPal Buy Now Pay Later Review: Is Pay in 4 Worth It?

Pay in 4 is PayPal's version of a buy now, pay later (BNPL) plan. It lets you split your purchase amount into four payments and pay over time. You can shop anywhere PayPal is accepted and get an instant approval decision. Pay in 4 payments are interest-free, and the purchase is backed by the security and safety of PayPal.

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PayPal Pay in 4: At a Glance

• What it is: Split purchases into 4 payments over 6 weeks

• Purchase amounts: $30 to $1,500

• Interest: 0% for Pay in 4 plans

• Late fees: None

• Credit check: Soft check that does not impact your score

• Approval: Instant decision at checkout

How Does PayPal Pay in 4 Work?

When you select PayPal and then choose the "Pay Later" option at checkout, you'll fill out a brief application. Once PayPal approves it, you'll pay 25% of the purchase price and make an additional payment once every two weeks over the next six weeks.

Keep in mind, the seller must support PayPal payments. That means you can use this option at many online stores that support PayPal. Popular merchants include Sony, J.Crew Factory, Puma and Eddie Bauer.

Here's a quick example of what payments might look like:

A $200 purchase would require $50 upfront, followed by three payments of $50 every two weeks.

PayPal Pay in 4: Pros and Cons

Who Should Use PayPal Pay in 4?

• PayPal Pay in 4 can be a good option for those looking to split a more expensive purchase into installments.

You can use Pay in 4 at merchants that accept PayPal payments in any supported currency. PayPal will automatically convert the purchase amount into U.S. dollars during the checkout process.

Who Shouldn't Use PayPal Pay in 4?

• Those looking to finance a purchase for over $1,500 should look for another BNPL service.

• Do not use PayPal Pay in 4 for impulse purchases or for items you will not be able to afford.

If you will not be able to pay off the purchase within the allotted time, the debt may go to collections.

How To Use PayPal Pay in 4

If the merchant accepts PayPal, you can follow these steps to use PayPal's Pay in 4 at checkout:

1. Under payment method, choose "PayPal."

2. Select the "Pay Later" option.

3. Under "Pay Later," select "Pay in 4" as your way to pay.

4. You will be given a link to the loan agreement for Pay in 4. The details will also be sent to your email once the purchase is complete. Review and approve your loan agreement.

5. PayPal will make an approval decision within seconds.

6. To complete your purchase, you’ll need to make the first payment up front. The rest of the purchase amount is split into three interest-free payments, with one due every two weeks.

7. Manage and make your payments online or via the PayPal app, available on iOS and Android.

Good To Know

Did your request to use Pay in 4 get declined? You can still use PayPal to pay, you'll just need to pick a different payment method from your wallet. PayPal will send you an email stating the reason you were declined.

Comparable BNPL Options

More and more companies are offering BNPL plans, so PayPal isn't the only option out there. Here are a few competitors to be aware of.

Klarna

Klarna was founded in 2005 in Sweden and also offers a Pay in 4 plan. Like PayPal, you can pay for your purchase with four interest-free payments over time. Klarna also has options for paying in 30 days and monthly financing.

Sezzle

Sezzle offers a plan to split payments into four. As long as you make your payments on time, there are no fees, and payments are interest-free. Unlike PayPal, Sezzle does not have fixed credit limits. Sezzle evaluates your limit with every purchase based on a soft credit check, your order history with the service and a few other factors.

Afterpay

Afterpay also offers 3, 6, 12 and 24 month payment plans. To sign up, you'll need your email, phone number, physical address, date of birth and a debit or credit card. Annual percentage rates (APRs) range from 0% to 35.99% and you could be hit with late fees if you fall behind on your payments.

Final Take

PayPal's Pay in 4 feature is an excellent option if you want to make a large purchase more affordable by paying it over time. It only works if the merchant accepts PayPal, but many online stores do. As long as you can make payments on time, Pay in 4 can be a simple way to spread out costs without paying interest.

PayPal Pay in 4 FAQ

Still have questions about PayPal Pay in 4? Here are answers to some of the most common ones:

Does Pay in 4 Charge Fees?

There are no fees to use Pay in 4. Payments are interest-free. Additionally, PayPal doesn't charge late fees for its BNPL products.

Does Pay in 4 Affect Your Credit Score?

PayPal performs a soft check on your credit when you apply for Pay in 4, but this doesn't impact your score.

A soft credit check gives the lender the ability to review your credit report and determine your creditworthiness. While these soft checks don't affect your credit score, they are listed on your credit report.

Can You Pay off a Pay in 4 Plan Early?

Yes, you can make an extra payment or pay off the entire plan early. There are no penalties or additional fees to pay it off early.