Installment financing is considered a type of unsecured loan. Historically it has been used mainly for more costly purchases in store but today this option is available for most purchases online with a Buy Now Pay Later option at checkout, regardless of price.

When you take out an installment loan in the name of Buy Now Pay Later (also known as point-of-sale-financing), you immediately receive the product you bought. Paying the amount back the retailer lets you spread out your payments over a set number of payments, known as installments – where the repayment schedule differs depending on the merchant’s offering.