PayBright Review: Buy Everything Now for 0%

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If you’ve been doing any online shopping lately (and let’s be real: is there any other kind of shopping now?), you probably noticed many of your favorite merchants offering a “buy now, pay later” option with PayBright.

The following PayBright review post is not sponsored and it contains no affiliate links. I’m writing this because when I googled for more information about PayBright, the web was a little sparse!

I spent the day researching this new fintech company to figure out what they offer, how useful it is, and how much they charge consumers. Here is everything you need to know bout PayBright!

What is PayBright?

PayBright is a Canadian fintech company that offers short-term interest-free installment loans for online shopping to consumers at checkout.

Instead of choosing to pay by credit card or PayPal when making an online purchase, a customer can choose to pay for an item with PayBright. They’ll be offered a 0% interest loan with four equal bi-weekly payments or a longer-term loan with interest for a larger purchase.

Is PayBright legit?

Yes! A 0% interest installment loan for your Sephora order seems too good to be true, but it’s for real.

As of right now, PayBright is available at over 7,000 online merchants in Canada, which is probably why you’ve been seeing it everywhere. They were also recognized as Canada’s fintech company of the year in 2017.

How does PayBright work?

PayBright has two payment plans for consumers: Pay in 4 and Pay Monthly. Here’s how they compare:

PayBright Pay in 4PayBright Pay Monthly
Term6 weeks6 to 60 months
Interest Rate0%0% to 29.95%
Processing Fees$0$1 to $4 per payment
Late FeesUp to $10 per late paymentUp to $30 per late payment
a direct comparison of the terms and costs of PayBright’s two different payment plans. Not all merchants offer both options.

To use PayBright, you simply have to select the option at checkout. Which PayBright plans are offered is up to the merchant. Most retailers have the Pay in 4 plan, and fewer have the Pay Monthly plan.

PayBright Pay in 4

Most online merchants offer the Pay in 4 option. This is the 0% interest 4-payment plan you’ve likely been seeing at checkout.

How to Use PayBright Pay in 4:

  1. Shop online as normal at a participating retailer
  2. At checkout, select the 0% interest, 4 payment plan from PayBright as a payment option
  3. Your first PayBright payment will be debited from your account at the time of purchase
  4. Your remaining 3 payments to PayBright will be debited bi-weekly over the following 6 weeks

PayBright Pay Monthly

PayBright Pay Monthly is for larger purchases, so you might not see it offered by every online merchant. This allows you to spread out your payments over 6 to 60 months, so it’s a much longer-term loan. The interest rate ranges from 0% to up to 29.95%. Yikes!

The Pay Monthly option also charges you a processing fee for every single payment. This ranges from $1 to $4. If you have a 60-month loan and are charged $4 per monthly payment, you’ll pay $240 in PayBright fees. Yikes again!

This payment processing fee is the only additional fee PayBright charges. They do not charge prepayment fees, service fees, or any other hidden fees.

How does PayBright make money?

PayBright makes money 3 different ways: interest, processing fees, and merchant fees. We already discussed interest and processing fees above, but here’s an explanation of the third way PayBright makes money.

PayBright makes money on merchant fees. You are receiving a 0% interest loan because the store you are buying from is paying a fee to PayBright to have them as a payment option.

Merchant fees to payment providers is pretty standard when it comes to convenience checkout options. All credit cards charge merchant fees, which is why you’ll often see small brick & mortar stores always ask that you pay by cash or debt. Merchant fees typically range from 2% to 5%, depending on the credit card provider.

PayBright is competing directly with credit card companies for these merchant fees. They’re hoping that instead of reaching for your Mastercard or Visa at checkout, you’ll choose PayBright instead.

Does PayBright affect your credit score?

PayBright does NOT do a credit check for their Pay in 4 plan, or if you pre-qualify. However, the PayBright Pay Monthly plan is subject to a credit check. This can affect your credit score, so think seriously before you apply.

While small purchases made with PayBright won’t impact your credit score, you should treat loans from PayBright the same as you would opening a credit card or taking out a line of credit anywhere else.

What happens if you don’t pay PayBright?

If you don’t pay the balance you owe to PayBright, you’ll be subject to increased interest, fees, and a black mark on your credit.

You’ll be charged up to a $10 late fee per payment if funds are not available in your account at the time the automatic payment is due for your Pay in 4 plan. This goes up to $30 late fee per payment for longer term loans.

In addition to your loan costing you more money in interest and fees if you don’t pay it, it can also damage your credit score. If you do not pay PayBright what you owe, your account will go into arrears and then ultimately to collections.

Is PayBright good for consumers?

The response to PayBright has been mostly positive, but it’s not without criticism.

At the heart of it, PayBright really is just another tool to accumulate debt. The convenience is great at first glance, but do you really need to split your $130 order of sweaters into 4 easy payments? The truth is, if you’re trying to make you online shopping costs more palatable, you probably need to tighten your budget not increase your access to credit.

There may be circumstances or reasons that make PayBright a great choice for you. But I would caution anyone against using it just because it’s there. Sometimes our best financial habits are simply avoiding bad ones. And getting used to paying for every purchase with instalment loans is a very bad financial habit.

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