Key Takeaway
- If you’re using BNPL to cover groceries or other essentials, a single missed payment can push your effective APR into triple digits. A fixed-rate personal loan, even at today’s elevated rates, is likely cheaper and more predictable than a BNPL plan you’re struggling to pay on time.
BNPL Is Not a Grocery Budget. The Data Says Otherwise.
Nearly 1 in 3 buy now, pay later users is now financing groceries with installment loans, 29% as of 2026, up from 14% two years ago, according to LendingTree’s 2026 BNPL Report. In a July 13 CNBC segment titled Buy Now, Stress Later?, senior personal finance correspondent Sharon Epperson called it out directly. BNPL, which started as a checkout perk for discretionary purchases, is increasingly filling the gap that a savings account used to fill.
If you’re shopping for a personal loan or already carrying one, this matters. BNPLs are competing with personal loans for the same pool of financially stressed borrowers, and the product is getting more expensive without most users realizing it.
Late payments among BNPL users hit 47% in the past year, up from 41% in 2025 and 34% in 2024, according to LendingTree. That’s a 13-point climb in two years. More than a third of BNPL plans now carry stated interest rates, sometimes up to 36%, a far cry from the 0% pay-in-four model most consumers picture when they hear “buy now, pay later,” according to a July 13 CNBC segment.
What a Missed BNPL Payment Actually Costs
Here’s what the marketing doesn’t say: The classic pay-in-four plan splits a $200 purchase into four $50 installments over about six weeks. The average BNPL late fee in 2023 was $9.99, according to the CFPB. A $9.99 fee on a $50 installment that was outstanding for two weeks works out to roughly 520% annualized APR. Stack a second missed payment on top and the fee-to-principal ratio worsens fast.
A well-qualified borrower can get a three-year personal loan at around 13.91% right now. This is based on Credible Marketplace data for the week of July 6 to July 11. Take a $5,000 personal loan at 13.91%% The monthly payment is roughly $170, and the total interest over three years comes to about $1,120. Fixed payment, fixed payoff date, and a rate that doesn’t spike because you were six days late on a biweekly installment.
This is a comparison BNPL lenders don’t want borrowers to make. The “no interest” framing is accurate for users who pay on time. For the 47% who didn’t pay on time last year, the effective cost is something else entirely.
BNPL loans mostly don’t show up on standard credit reports. Lenders price personal loans off your FICO score at the moment of application. Soft pull first to give you a rate range, hard pull when you accept. If you’re carrying three open BNPL plans, the personal loan underwriter won’t see them. Your debt-to-income ratio looks better than it is, which can get you approved for a loan you’re already stretched too thin to afford. The CFPB found that 66% of BNPL users hold multiple loans simultaneously. Among the LendingTree survey respondents, 63% have held multiple plans at once, and 25% have juggled three or more at the same time. Loan stacking of this kind is invisible to the credit system and to you until the biweekly due dates start piling up.
Who’s Most Exposed
The LendingTree data points to a specific group under real pressure. Among Gen Z BNPL users, 38% have used the loans for groceries. More than half of all BNPL users, 54%, say they wouldn’t be able to make ends meet without them. Among parents with children under 18, that figure rises to 62%. Some 13% have used BNPL to pay rent, and 15% have used it for medical, dental, or veterinary bills.
These aren’t discretionary purchases. Using a short-term installment loan to buy groceries means you’re bridging the gap between income and basic expenses. The BNPL plan is the wrong tool for that gap. The repayment horizon is too short, the late-fee structure punishes any disruption to cash flow, and the loan is invisible to your other creditors.
A personal loan is a slower, more deliberate form of borrowing, but for someone who genuinely needs to bridge a meaningful shortfall over months rather than weeks, it’s a more honest product. The interest rate is disclosed upfront. The payment is fixed. Missing a payment affects your credit report in a way that creates accountability. That last part sounds like a downside. For some borrowers, it’s the mechanism that keeps the borrowing real.
One thing worth checking before you apply: look at the rate disclosure footnote, not the homepage headline. Most online lenders advertise their lowest rate. This one is available only to borrowers with a FICO of 720 or above who enroll in auto-pay. Without auto-pay, the floor rate is typically 0.25 to 0.50 percentage points higher, and that discount disappears automatically if you ever update your bank account and forget to re-enroll. Over a 36-month term on a $5,000 loan, that difference adds up to roughly $45 to $90 in extra interest. Small, but avoidable.
If you’re comparing personal loan rates against your current BNPL situation, start by asking whether you paid late on any plan in the past year. If so, the “interest-free” label on these loans is already a fiction.
The BNPL late-payment surge doesn’t mean people are irresponsible. BNPL loan originations from major lenders jumped from roughly $3 billion in 2019 to more than $45 billion in 2023, according to the CFPB. The product expanded far faster than consumer awareness of its costs. There was some good news buried in LendingTree’s June 2026 tracker: About 88% of users who asked to have a late fee waived got it reduced or eliminated entirely. If you’ve missed a payment, call before you assume the fee is settled.
