Source: Business Insider
Point-of-sale (POS) loans have become increasingly popular, with offers from companies like Afterpay, Affirm, and QuadPay popping up on many retailers’ sites. POS loans offer the opportunity to buy a product now and pay for it in installments, like layaway but in reverse. These short-term loans may be beneficial for consumers buying large items, like furniture or appliances, who have the money in their monthly budget to make payments. But they can also encourage poor spending habits. Read more personal finance coverage . The concept of “buy now, pay later” has long had appeal. Credit cards make it easy. But, increasingly, according to research from Bankrate.com , people are choosing alternative point-of-sale (POS) lenders to fill that financial gap. A POS loan is essentially the opposite of layaway. With layaway, you pay for your item over time and then take it home when you’ve cleared your bill. With a POS lender , you get your item first then pay for it over a specified period of time.