Why Fintech Companies Are Moving from BNPL to EMI Loans and Consumer Credit in India

Why Fintech Companies Are Moving from BNPL to EMI Loans and Consumer Credit in India

Byadmin

In recent years, many fintech companies in India became well-known for offering “Buy Now, Pay Later” (BNPL) services. It was a new and easy way for people to shop without paying upfront. But now, the same companies are changing their plans. Instead of BNPL, they are now focusing more on EMI-based loans and consumer credit.

So, what’s going on? Why are these companies changing direction? What does this mean for you as a user or borrower? In this article on Tech Bullion, we break it down in plain and easy-to-understand words.

What Is BNPL?

BNPL, or Buy Now Pay Later, is a payment option where you can purchase a product now and pay for it later. Many times, you get around 15 to 30 days to make the payment. In some cases, the amount is broken into smaller parts to be paid over time—without any interest.

This became popular with online shopping apps. You may have seen options like LazyPay, Simpl, MobiKwik Zip, or Slice during checkout. These companies allowed people to buy food, clothes, gadgets, and other items without worrying about instant payments.

Why has the BNPL Became a Problem?

BNPL seemed like a good idea, but it had its own set of problems. Here’s what went wrong:

  • People started using it for too many small purchases.
  • Many users did not keep track of the due dates.
  • Missed payments led to penalties and bad credit scores.
  • Some users were not even aware that they were borrowing money.

Because of these problems, the Reserve Bank of India (RBI) stepped in. In 2022, the RBI brought in stricter rules for lending through BNPL. Companies were told to work only with registered banks or finance companies and follow proper checks before offering credit.

So What Are Fintechs Doing Now?

Now, fintech companies are focusing on something more structured—EMI-based personal loans and consumer credit.

What does this mean?

Instead of giving you 15 days to repay, companies now give you the option to borrow a fixed amount and pay it back in monthly installments (EMIs). These loans come with clear terms—like interest rate, repayment period, and total cost.

Many fintech firms are moving towards this model as it’s more secure, clear, and easy for both the lender and the user to manage.

For regular updates on changes in lending and finance, keep visiting Tech Bullion.

Benefits of EMI Loans Over BNPL

Here’s why EMI-based loans are becoming the new choice:

1. You Know Your Monthly Payments

EMIs are fixed. You know exactly how much you will pay every month. No surprises.

2. You Get More Time

Unlike BNPL, which had short repayment windows, EMI loans allow 3 months to even 2 years for repayment.

3. It Helps Your Credit Score

If you pay your EMIs on time, it improves your credit history. This can help you in the future when you apply for a home loan or car loan.

4. You Can Borrow More

BNPL was for small amounts like ₹1,000 or ₹5,000. But EMI loans can go up to ₹50,000 or even ₹2 lakhs, depending on your credit profile.

Which Fintechs Are Making the Shift?

Here are some big players who are moving away from BNPL:

  • LazyPay (by PayU) is now offering personal loans with EMIs.
  • MobiKwik has also added EMI options under its Zip product.
  • BharatPe now offers credit to small shopkeepers in a more structured way.
  • Slice, which earlier worked like a credit card with pay-later options, now works more like a full credit solution.

These companies have also tied up with banks and NBFCs (Non-Banking Financial Companies) to follow RBI rules.

What Should You Do?

If you are someone who uses BNPL or is thinking of taking a personal loan, here are some things to keep in mind:

  • Borrow Only What You Can Pay Back: Don’t borrow just because it is easy. Make sure you can manage the EMIs every month.
  • Always Read the Terms: Check the interest rate, the number of EMIs, and late payment charges.
  • Use Credit for Useful Things: It’s better to use loans for education, health, or home needs instead of spending on luxury or unnecessary items.
  • Track Your Credit Score: Make timely payments and don’t miss any EMI. This keeps your credit score healthy.

To stay smart with loans and credit, follow Tech Bullion, where we regularly post news and tips for Indian readers.

What Does This Mean for the Future?

The move from BNPL to EMI loans is a sign of growing maturity in the Indian lending space. Fintechs have understood that they need to focus on long-term financial health rather than short-term excitement.

Also, with RBI watching closely, companies are taking more care to be fair, open, and safe in how they give loans.

For customers, this shift is actually good. EMI loans come with more clarity, better customer service, and less chance of hidden fees.

Final Words

Fintechs are changing fast, and the shift from BNPL to EMI loans is one of the biggest changes in recent times. This move is not just about rules—it’s about making credit better and easier to manage for everyday people.

If you are planning to take a loan or use credit for your purchases, make sure you understand the terms, choose the right option, and pay on time.

For more clear and simple updates on loans, credit, fintech, and personal finance, visit Tech Bullion regularly. We keep our content short, useful, and written in everyday language—just like this.

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