Buy Now Pay Later (BNPL) services like Afterpay and Zip feel like small, harmless ways to spread out a purchase. But when you apply for a home loan, lenders see them differently.
Why lenders care about BNPL
Lenders review your bank statements and credit file. BNPL can show:
- Ongoing commitments, which reduce borrowing power
- Spending patterns, especially if you use BNPL often for everyday items
- Cash flow stress, if BNPL is used to bridge gaps until payday
Frequent BNPL use for groceries or bills can raise questions about your budget.
BNPL is now regulated credit
From June 2025, BNPL providers became subject to credit laws, including licensing and responsible lending checks. BNPL accounts can also appear on your credit file through comprehensive credit reporting.
This means lenders have better visibility of your BNPL accounts and repayment history.
How lenders treat BNPL
Policies vary:
- Some count the BNPL limit as a commitment, similar to a credit card
- Some count current repayments
- Some look at the pattern of use rather than the amount
- Some ask you to close accounts before settlement
Late payments matter
Missed BNPL payments can show up on your credit file. A string of missed payments, even for small amounts, can affect approval.
What to do before applying
- Pay off any outstanding BNPL balances.
- Close accounts you don't need, and keep evidence of closure.
- Stop using BNPL for at least three months before applying, if you can.
- Check your credit file for any BNPL accounts or missed payments.
A practical approach
Using BNPL once for a TV isn't going to sink your application. Using it weekly for groceries, petrol and takeaway might. Lenders want confidence that you can manage your money comfortably once you have a mortgage.
Frequently asked questions
Will one BNPL purchase stop me getting a loan?
Unlikely. Patterns and missed payments matter more than a single purchase.
Should I close my Afterpay account?
If you're applying soon, it can help. Some lenders count available limits as debt.
Does BNPL affect my credit score?
It can, particularly if payments are missed. On-time payments can also be reported under comprehensive credit reporting.
Unsure how your BNPL use looks to a lender? Call Finfident on 02 6416 2142, or Call, Text or WhatsApp 0424 545 654. We'll review your statements and tell you what to tidy up.
Want to know if this applies to you?
Talk it through with a Finfident broker. It's free and there's no obligation.
