Buy now, pay later, or BNPL, has become a more popular payment option among shoppers over the past few years.

PayPal’s Pay in 4, in particular, is the online payment platform’s version of a buy now, pay later program. It allows you to split purchases into four equal payments with no interest or fees over a period of six weeks.

Keep reading to learn the ins and outs of this BNPL payment option, when to use it and some alternatives to consider.

How does PayPal Pay in 4 work?

PayPal’s Pay in 4 is a buy now, pay later installment loan available through select retailers. You must be at least 18 years of age (or your state’s age of majority) to use Pay in 4. Availability may depend on where you live. You also need an existing PayPal account that’s in good standing.

Pay in 4 allows you to break up payments for select online purchases into four equal installments. The first payment is due at the time of purchase, while the remaining payments are due every two weeks until you pay off the balance. There are no fees to use Pay in 4 and no interest charges. Pay in 4 is available for online shopping carts totaling between $30 and $1,500.

Pay in 4 isn’t available with all online retailers or goods. If it’s an eligible payment option, Pay in 4 will show up as an available payment method during checkout. Even if Pay in 4 is listed, it doesn’t mean you’re automatically approved to use the BNPL service. Pay in 4 is an installment loan, so you must apply to use the service. If you choose Pay in 4 as your payment method, you’ll be taken to an application screen. PayPal uses information from your application, your financial position and your PayPal account history to determine eligibility for the loan.

The decision process occurs almost instantly. If approved, you’ll be redirected to finish checking out and be charged for the first loan payment. The other payments are automatic, using the payment method provided at the time of purchase. You can choose to pay extra or pay the balance in full at any time before the end of the loan term. To make unscheduled payments, log in to your PayPal account, navigate to your Pay in 4 plan and click “make a payment.”

When should you use PayPal Pay in 4?

Despite their convenience, BNPL apps and services like Pay in 4 usually aren’t the best payment option for shopping online. There are some instances, though, where it can make sense to use PayPal Pay in 4.

  • You don’t qualify for other lending: Pay in 4 could help consumers with poor credit qualify for financing when they’re unable to get a credit card or personal loan. PayPal looks at more than just your credit to determine eligibility for a Pay in 4 loan, so you may qualify even with bad or poor credit history.
  • For necessary expenses: If you have an immediate, necessary need but lack the funds to cover the purchase right now, Pay in 4 opens the door to 0 percent financing with a short-term loan.
  • To keep your credit utilization lower: If you’re purchasing high-dollar items, using Pay in 4 with payments going on a credit card uses less of your available credit at one time.

When you shouldn’t use it

Pay in 4 looks attractive, especially with no fees and no interest charges. However, there are some cases when you should avoid using BNPL services:

  • It overextends you financially: Pay in 4 is convenient because you only have to cover a portion of the cost at the time of purchase. With convenience comes the temptation to overspend on purchases, which can lead to excessive debt. And while Pay in 4 doesn’t charge interest, the payment option you chose to use might.
  • For unnecessary purchases: Generally, you only want to take out a loan for necessary expenses. You shouldn’t choose Pay in 4 to cover impulse purchases or other unnecessary items.

How PayPal Pay in 4 impacts your credit score

Luckily, PayPal Pay in 4 doesn’t directly affect your credit score. PayPal only performs a soft credit check during the application process, which won’t negatively impact your credit score. Other BNPL companies may run a hard credit check, which can temporarily cause your credit score to drop a few points.

Pay in 4 makes it extremely easy to buy something today and pay for it later, which can lead to overspending. If you use a credit card as your payment choice, you could rack up credit card debt if you don’t have the funds to cover the purchases. Overspending can also cause your credit utilization and debt-to-income ratio to increase. Both play a significant role in your credit score. The more debt you carry, the more likely your credit score will decrease over time.

Alternatives to PayPal Pay in 4

It’s hard to argue against the convenience of Pay in 4 and other BNPL platforms, but it may not be the best option for you. Here are some alternative payment options to consider if you have upcoming purchases.

0% intro APR credit cards

Most BNPL plans don’t charge interest, but the payment period is short. If you need a longer period of time to pay off purchases, consider a 0 percent intro APR credit card. These credit cards offer an introductory 0 percent APR on new purchases for extended periods of time, often between 12 to 21 months. Keep in mind that the card’s standard APR will apply to any balance carried over beyond the introductory period.

Personal loan

Another way to access a longer repayment period is through a personal loan. Unlike Pay in 4, you’ll pay interest on a personal loan, but there are loans available for borrowers at all credit levels. With the longer repayment period, you may receive lower monthly payments than you would receive with Pay in 4.

Personal line of credit

A personal line of credit allows you to withdraw funds from a revolving credit line up to a limit as needed for purchases. With a personal line of credit, you only pay interest on what you spend. Lines of credit usually feature variable interest rates, similar to a credit card.

Qualifying for a personal line of credit can be challenging if you don’t have good to excellent credit, unless you have a good relationship with your financial institution already. If you have an existing relationship with a bank, a personal line of credit can give you access to funds as you need them for various purchases over a specified period.


Paying for purchases with cash helps you avoid overspending or taking on debt. A debit card allows you to spend directly from your checking account, so you can only spend what you have in the account. There are no interest charges or payments to worry about with cash. However, debit cards generally do not earn rewards and don’t offer the same fraud liability protection as credit cards, in most cases.

The bottom line

Pay in 4 is a convenient way to make purchases online now and pay them off over time. The best way to use BNPL services like Pay in 4 is to only use it on purchases you were already planning to make, and having money budgeted for the purchase can help you avoid added debt and costly interest charges.

Of course, BNPL services aren’t right for everyone, so be sure to consider other options, such as a 0 percent intro APR credit card, personal loan, personal line of credit and more.