1.How do buy now, pay later plans work? Buy now, pay later is a payment option at checkout that allows you to make purchases and to pay off the balance in weekly, biweekly or monthly installments. As long as you pay on time, you usually won’t pay interest or fees. Though these payment plans may make it easier to manage more expensive purchases, keep in mind that you’re still taking on debt, in much the same way as when you use credit cards..

2.Can I afford to make the payments? One of the most appealing aspects of buy now, pay later programs is you can get items immediately—even if you don’t have all the money to pay for them. But that convenience comes with the risk of being tempted to buy things impulsively or to spend more than you can afford. It’s important to remember that buy now, pay later lenders may not perform a credit check before approving you. So, unlike when you’re issued a credit card, your ability to afford payments hasn’t been assessed. It’s up to you to keep yourself from getting overextended. Plan your spending and stick to your budget.

Once you know what you qualify for, save time and energy by narrowing your search to homes that fit your financial criteria. Try to preview properties online, and have your real estate agent show you only listings that are right for your needs and your budget. When you find a match, your agent can help you make an intelligent, informed offer. If your offer is accepted, a purchase contract is drawn and typically contains a good-faith deposit (“earnest money”) to show your commitment, usually between 1 percent and 3 percent of the sale price.

3.What happens if I miss a payment? This is a situation in which buy now, pay later plans can get costly. Many providers charge late fees that can increase to as much as 25 percent of your initial purchase. They might also block you from using their plan in the future. And some lenders may transfer your account to a collections agency or report late payments to credit bureaus, which can hurt your credit score and your ability to get favorable terms on future loans. Fees and penalties vary among plan providers (some don’t have any), so make sure you read the fine print of the loan agreements.