A Buy Now Pay Later App is a blessing when you are in financial hardship. Afterpay lets a user order any essential things from listed merchants and splits the bill into four installments so that the user does not need to feel the burden to pay the amount. The business model was designed to offer free services to the customers until they pay on time. Afterpay does not impose any fees until a customer pays on time. But If it fails, then Afterpay starts charging late fees. The overdue pay option works in favor of the customer, but normally Afterpay imposes negative marks and restrictions on the account based on the customer’s payment history.
Afterpay still gives the chance to pay for the overdue. Now the question is, does this overdue payment solve the issue? Does it restore the account even if you pay the late fees? The answer is not straightforward. Afterpay decides everything based on a customer’s credit history and payment behavior. Sounds complicated? Let me explain to you below.
How Does Afterpay Work?
Before we get into the Afterpay overdue policy, you should be clear about how Afterpay works. Afterpay is a fairly launched interest-free payment service. Consumers can buy goods and get them instantly, then pay back their purchase in four fortnightly installments. There are no signup fees, and Afterpay does not charge interest.
In contrast to other buy-now-pay-later services, Afterpay has a different business model. It makes sure that if you make all your payments on time, you won’t need to pay any interest or fees. In other words, your final cost could be basically the same as if you paid in full for everything. But you’ll owe $8 in late fees, which could be 25% of the order total if you don’t make it on the date. As a result, you won’t be able to make any other purchases through Afterpay until you catch up on your late fees.
Afterpay gets its money from the merchants it partners with since it doesn’t charge interest. By offering this kind of payment plan to customers, merchants hope to boost sales.
If you pay overdue of Afterpay payment can you use Afterpay again?
First, let’s understand the situation after you miss a payment. You won’t be able to make any other purchases using Afterpay if you don’t make a payment. It’s because Afterpay immediately pauses your account after making a payment miss. Usually, there’s a 10-day grace period (unless your payment schedule specifies otherwise). You will be charged a late fee if you don’t pay within the grace period. There will always be one late fee per installment, and the total late fees on your order will never exceed 25% of your original order value.
Let’s assume that your account is paused due to an accidental miss of the installment, and you paid it later with or without late fees. Now the question is, what happens next? First, I want to assure you that Afterpay won’t ban your account and will let you resume it. But you won’t be able to use it as you used it before. At least you will have to go through a limited usage procedure. That means it won’t let you purchase like before.
Afterpay, keep assessing the account you use. Whatever you do with your account. Afterpay monitors all the attempts. Based on your activities, such as payment history, account holding, and everything, Afterpay ranks your account and lets you order or purchase accordingly. Afterpay takes overdue as adverse payment history. The more you do it, the more you will lose control of your freedom to purchase something using your Afterpay credit.
Afterpay can still decline your purchase order despite having paid your late fee. You will not get to manage the purchase because the risk management team from Afterpay thinks it’s risky. The risk assessment system checks all the parameters and determines your spending limit. So, if your payment history is not that good, then Afterpay will automatically reduce your spending limit. You will not be able to order as much as you used to. This will also impose daily order limits on you.
On the other hand, if you’re a new customer to Afterpay and skipped the installment once, you might not be penalized. It’s best to keep the Afterpay terms and rules in mind and pay your installments on time.
To avoid all these hassles, all you should do is pay the installments on time. The best solution here is to choose automatic payments. You can link your debit or credit card with Afterpay. Then the installation will be automatically transferred to your Afterpay account on time from your linked debit or credit card.
If an automatic payment fails, what happens?
You’ll get an SMS and email if the automatic payment doesn’t work. You can pay an overdue payment by logging in to your Afterpay App or online and clicking PAY NOW next to your “overdue payment” in your payment schedule. If you’re having trouble making a payment, get in touch ASAP, and the Afterpay support team will work something out.