What this calculator does
Buy now, pay later (BNPL) plans split a purchase into smaller payments. Enter the price and the plan: "pay in 4", with a first payment at checkout and three more every two weeks, or monthly payments with interest. Add any late fees you might pay. The calculator shows each payment, the schedule, the total you pay, the yearly rate your interest and fees add up to, and the interest you would pay on a credit card with the same payments.
How it is worked out
- Pay in 4: four payments of the price ÷ 4; only three are borrowed, because the first is paid at checkout.
- Monthly plan: payment = price × r ÷ (1 − (1 + r)−n), with r = APR ÷ 12 and n payments.
- Yearly rate with fees: the rate at which the payments still owed, with any late fees added to the last one, are worth what you borrowed, times the number of periods in a year (26 for two-week periods, 12 for months).
Example: a $400 purchase in 4 payments of $100 costs nothing extra if every payment is on time. One $7 late fee raises the total to $407, which works out to about 29.9% a year on the $300 borrowed for six weeks. A $1,200 purchase over 12 months at 15% costs $108.31 a month and $99.72 of interest.
What the CFPB says
The Consumer Financial Protection Bureau describes BNPL as an installment loan that often lets you split a purchase into four interest-free payments every two weeks, and notes that many plans charge no interest but most charge late fees for missed payments. It also warns that BNPL loans may not offer the same dispute protections as credit cards if an item is faulty or never arrives (CFPB).
Frequently asked questions
Is buy now, pay later free?
Pay-in-4 plans usually charge no interest if you pay on time. Late fees, longer plans with interest, and bank fees for failed automatic payments can add cost.
Is BNPL cheaper than a credit card?
If you pay on time and the plan has no interest, it can cost less than carrying a card balance. With late fees or interest, it can cost more. The calculator compares both with the same payments.
What happens if I miss a payment?
Most lenders charge a late fee, and some stop you from using the service until you pay. Check your plan's terms.
How many BNPL plans can I have?
That depends on each lender. Several plans at once are easy to lose track of, so list every payment date in your budget.