What’s changed with Buy Now, Pay Later?
Laybys and hire purchase arrangements have been around in Australia for decades, but the BNPL boom really took off when Afterpay was founded in 2014. Other providers soon followed, and BNPL quickly became a standard checkout option for everything from clothing to electronics.
Uptake has tended to be strongest among younger Australians, many of whom use BNPL in place of a credit card. As usage grew, so did scrutiny of how these products were regulated.
Recent regulatory changes
In its early days, BNPL operated outside the National Consumer Credit Protection Act (NCCP), but that changed with the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024, which received royal assent on 10 December 2024.
The new rules took effect from 10 June 2025. Since then, BNPL providers have needed to hold an Australian Credit Licence (ACL) and be members of the Australian Financial Complaints Authority (AFCA), subject to transitional arrangements. BNPL products are now treated as a form of regulated low cost credit, and ASIC has described the reforms as an important step in improving protection for consumers.
Providers now have to assess whether a product is suitable for you before lending, which can include a credit check and questions about your income and expenses. They can choose between the standard responsible lending obligations and a scaled-down version designed for low cost credit.
Because licensed providers can take part in comprehensive credit reporting, your BNPL accounts and repayment history may now appear on your credit report.
How lenders may see BNPL when you apply for a loan
Every lender has its own assessment criteria, and having a BNPL account won’t automatically mean a loan application is declined. However, there are some common threads in how lenders look at it.
Your bank statements
Most lenders will review your recent bank statements when assessing a car, personal or asset loan. Regular BNPL instalments will show up as ongoing commitments in your expenses, which may affect how much a lender is willing to lend.
Your credit report
Lenders can see up to 24 months of repayment history for accounts reported under comprehensive credit reporting. On-time repayments can help build a positive credit history, while missed repayments can drag your score down.
Number of accounts
Some lenders may question your ability to manage credit if you hold several BNPL accounts at once. Small, overlapping accounts may make your spending look less predictable.
Unused limits
Some lenders treat an open but unused BNPL limit as credit you could draw on at any time. This may also reduce how much you can borrow.
TL:DR
BNPL can affect your loan application in two main ways: how much you can borrow and how your credit history looks. Regular instalments and open limits may reduce your borrowing power, while your repayment record may now show up on your credit report for better or worse. Simply holding a BNPL account won’t rule you out, but managing it well before you apply can put you in a stronger position.
Tidying up your finances before you apply
If you’ve used BNPL in the past and you’re planning to apply for a car, personal or asset loan soon, a few simple steps can make the process smoother. If you’re eyeing off a purchase in the new year sales, the next few months are a good time to start.
Check your credit report
You’re entitled to a free credit report every three months from each of the major credit reporting bodies, including Equifax, Experian and Illion. Look for any BNPL accounts you may have forgotten about and anything that looks incorrect.
Pay off and close accounts you no longer use
Fewer open accounts and limits can give lenders a clearer picture of your finances when they assess your application.
Don’t miss a repayment
Make sure automatic payments are set up and that your account has enough funds to cover each instalment.
Try not to stack new purchases
Hold off on non-essential BNPL purchases in the months before you apply. Fewer BNPL payments on your statements means fewer commitments to declare.
Be upfront
List any BNPL accounts in your application. Lenders are likely to see them on your statements or credit report anyway, and being open from the start helps build trust.
How a broker can help
Because lenders treat BNPL differently, some may be more flexible with your history than others, and the right lender for you will depend on your full financial picture. A broker can look at your situation, compare options across a range of lenders and point you towards those whose criteria suit you, whether you need a car loan, caravan or boat finance, or a personal loan.
We can also help you get pre-approved before Boxing Day and new year sales, so you know your budget and can negotiate with confidence. If you have BNPL accounts and are wondering how they might affect your application, get in touch and we can talk it through.
This article is general information only and does not take into account your personal circumstances. Lending criteria vary between lenders.
