Buy Now, Pay Later... Get Denied?

In a world of tap-and-go gratification, services like Afterpay, Zip, Klarna and others have become part of the everyday spending arsenal for many young Australians. Why wait for payday when you can split the bill into four? But while Buy Now, Pay Later (BNPL) platforms offer convenience, they could quietly complicate your future home loan dreams.

The BNPL Trap: Convenience Comes at a Cost

BNPL isn’t technically a credit card, but lenders are starting to treat it like one. Every time you sign up for a buy now, pay later (BNPL) service, it creates a record. Miss a payment? That can be flagged. Stack up multiple accounts? That’s more financial risk on paper. Even if you always pay on time, the sheer number of accounts or ongoing repayments could make lenders cautious.

Lenders Are Watching

More banks are taking a closer look at how borrowers manage short-term debt. BNPL services are appearing on credit reports through open banking or bank statements, and they can suggest overreliance on micro-credit. For someone applying for a mortgage, this can raise red flags around financial discipline and servicing ability.

A $100 fortnightly Afterpay instalment doesn’t seem like much until it’s bundled with subscriptions, streaming, Uber Eats, and gym memberships. Lenders want to know how you live, not just what you earn. And BNPL activity can reveal a lot.

What to Watch:

• Multiple BNPL accounts – It looks messy even if they’re all paid on time.
• High usage – If you're always splitting payments, it may signal cash flow stress.
• Missed or late repayments – Some platforms now report these to credit agencies.
• Inconsistent financial behaviour – Lenders value stability. Juggling payments every fortnight might make them question how you’d manage a mortgage.

Pay Later... Think Now

We’re not saying Afterpay is evil or that you should delete every app. Used wisely, BNPL can be part of a budget. However, if you plan to apply for a home loan within the next year, it may be worth pausing, consolidating, or clearing out these accounts early.

Your credit report should tell the story of someone who’s ready to handle a mortgage, not someone who's constantly borrowing to cover basics.

Ready to get your finances in shape for your first (or next) property?

Chat to our team at enquiries@younginvestorsclub.com.au. We can help you understand how lenders think and how to present the best version of your financial self.

Disclaimer: This article provides general information only and does not constitute financial advice. Please speak with a licensed mortgage broker or financial adviser for advice specific to your situation.