Should you use a buy now, pay later loan? Here’s what to know

Should you use a buy now, pay later loan? Here’s what to know Economy Jun 5, 2025 3:29 PM EDT

Buy now, pay later programs are everywhere.

Unlike layaway programs, buy now, pay later programs let you purchase goods immediately, paying them off over time through a loan from a third party company, like Klarna, Afterpay or Affirm.

More than one in five consumers with a credit record in 2022 used buy now, pay later programs, according to a report released this year by the Consumer Financial Protection Bureau.

But reports from Klarna and other financial services companies show that over the past year, a growing number of users are falling behind on their payments .

Here’s a look at why these loans have become so popular and what consumers should keep in mind to protect themselves.

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