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Everything You Need to Know About Apple Pay Later | Personal Loans

Key Takeaways

  • Apple Pay Later is a buy now, pay later (BNPL) service that lets you finance small purchases into four equal payments.
  • There are no interest charges or fees, making it a good alternative to using a credit card.
  • You can use Apple Pay Later anywhere you use Apple Pay. 

Last year, Apple introduced Apple Pay Later, which lets you finance small purchases without incurring fees or interest charges. You can apply for loan amounts ranging from $75 to $1,000 and spread the cost of purchases across four installments over a six-week period.

Apple Pay Later can be a great way to finance a purchase instead of racking up high-interest credit card debt. But you’re still taking out a loan, so it’s important to understand how the service works before using it.

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How Does Apple Pay Later Work?

Apple Pay Later is a feature of Apple Pay. You can use it in apps, online and on your iPhone or iPad. Once you’ve found an item you want to buy, use Apple Pay to check out and choose the Pay Later tab. You’ll know within seconds if your purchase is approved or not.

Apple pays the merchant for the purchase, and you then repay the loan in four equal installments over six weeks without any fees or interest charges. The first payment is charged upfront, and the remaining three payments are due every two weeks.

For example, let’s say you want to make a $600 purchase through Apple Pay Later. You’ll make a $150 down payment at checkout, then three more $150 payments every two weeks until the loan is repaid. Every Apple Pay Later loan is capped at $1,000.

Apple Pay Later Requirements

You’re eligible for Apple Pay Later if you meet the following conditions:

  • You’re at least 18 years old.
  • You’re a U.S. citizen or lawful resident with a valid U.S. address (P.O. boxes aren’t accepted).
  • Two-factor authentication is set up for your Apple ID.
  • You’ve updated to the latest version of iOS or iPadOS.
  • There’s no freeze on your credit report.
  • You have a driver’s license or state-issued photo ID.

What to Do If You’re Not Approved For The Amount You Applied For

If you aren’t approved for the amount you requested, you may be approved for a smaller amount. This can be due to a number of reasons, ranging from a low credit score to having too many outstanding loans.

If the loan you’re approved for doesn’t cover the full amount of what you wanted to buy, you can:

  • Use the approved funds for a different purchase.
  • Remove items from your cart until you’re within the approved amount to spend, then resubmit your application.
  • Switch to “Pay in Full” with Apple Pay.

Does Apple Pay Later Affect Your Credit Score?

When you apply, Apple will do a soft pull on your credit, which won’t affect your credit score. If you are given a loan, Apple then reports your loan information and payment history to one of the three major credit bureaus. So missing payments could negatively affect your credit score, and making them on time could help build your credit.

If you’re concerned about remembering to make a payment on time, it’s a good idea to enable autopay. This will help you avoid missing a payment and potentially damaging your credit score.

Does Apple Pay Later Charge Interest and Fees?

One of the benefits of using Apple Pay Later is that there are no interest charges or fees. Apple doesn’t even charge a late fee for missing a payment. This makes it a good alternative to financing your purchase with a credit card, which charges an average interest rate of 21.47%.

How Do You Pay Your Apple Pay Later Balance?

Once you’re approved for an Apple Pay Later loan, your 25% down payment is debited from your designated account.

For the following three payments, autopay is automatically enabled. However, you have the option to turn it off in the Wallet app. To make a one-time manual payment, you can open the Wallet App, choose Apple Pay Later, select the upcoming payment and tap the Pay Now button.

You can make your payments on the day they’re due or pay off the remaining balance early. You’ll have to confirm any payments with your passcode or Face ID.

Is Apple Pay Later Safe?

Apple Pay Later comes with the same security as Apple Pay. Apple does not share your purchase history, loan details or credit information with merchants or marketers. And security features like your passcode and Face ID ensure no one else can access your account.

How Do Returns Work With Apple Pay Later?

If you decide to return your purchase, the merchant will notify Apple Pay Later and a refund will be applied to your account. Your loan payments will then update accordingly in your Wallet.

If the refund is greater than your loan balance, the remaining funds will be deposited to your debit card. However, the processing time depends on the merchant, and some take up to 10 days to process refunds.

Should You Use Apple Pay Later?

Apple Pay Later is a fast and convenient way to finance a purchase without incurring any interest charges. Unlike other buy now, pay later services, Apple doesn’t charge late fees if you miss a payment.

But it’s not entirely without risk – missing even one payment could significantly damage your credit score. And BNPL services can make it easy to overextend yourself financially. For example, a report by the Consumer Financial Protection Bureau found that BNPL users are more likely to have other types of debt and lower credit scores.

If you choose to use Apple Pay Later, stick to a low purchase amount, make sure you can afford the payments and avoid taking out any other BNPL loans until that purchase is fully repaid.

Sarah Goldberg
Sarah Goldberg

Sarah is a seasoned financial market expert with a decade of experience. She's known for her analytical skills, attention to detail, and ability to communicate complex financial concepts. She holds a Bachelor's degree in Finance, is a licensed financial advisor, and enjoys reading and traveling in her free time.

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