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BNPL & Payday loans

Paige
Paige

Buy now pay later (BNPL) and payday loans are easy to start and easy to underestimate. Used carelessly, they can quietly trip up your next loan application. Here's what's really going on, plus what changed in Australian law in 2025.

How lenders see BNPL and payday loans

When you apply for finance, a lender checks whether you can afford the repayments. They look at your regular commitments, and that includes your BNPL instalments and any short-term loans. A handful of active BNPL accounts can shrink how much you're allowed to borrow, even if each one feels tiny. Payday loans can raise a bigger flag, because regular use can suggest you're stretched.

The OAIC even suggests closing BNPL accounts you no longer use, pointing out that juggling lots of lines of credit makes repayments harder to manage.

The big 2025 change to BNPL

For a long time BNPL sat outside Australia's main credit laws. That's changed. From 10 June 2025, BNPL products are regulated as credit. This came in through the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024, which brought BNPL under the National Credit Code.

According to ASIC and AFCA, it means BNPL providers now have to:

  • hold an Australian Credit Licence,
  • be a member of AFCA for dispute resolution,
  • follow the National Credit Act, the National Credit Code and responsible lending rules, and
  • consider hardship requests and credit reporting.

The upside for you, as AFCA explains, is free, independent help if something goes wrong with a BNPL provider.

What this means for you

  • BNPL is "real" credit now. Treat it with the same care as a credit card, because the rules increasingly do.
  • Missed BNPL payments can matter. As regulated credit, providers can engage with credit reporting, so falling behind isn't consequence-free.
  • Tidy up before you apply. Closing unused accounts and clearing small balances can lift how much you're able to borrow.
  • Payday loans are expensive. Before you take one, Moneysmart's guide to payday loans shows the true cost and safer options.

A simple pre-application checklist

  • List every BNPL and short-term loan you have.
  • Close the ones you don't use.
  • Clear or reduce balances where you can.
  • Make sure every repayment is up to date before you apply for bigger finance.

How Perfect Score helps

Part of getting finance-ready is untangling these smaller commitments so a lender sees a clean, manageable picture. Our education program covers exactly this, how everyday credit products affect your approval, and we're partnered with Ausloans Finance Group and Drive Approved to help when you're ready to apply.

Not sure how your BNPL or short-term loans are affecting you? Book a free, no-obligation assessment.

Sources and further reading

General advice warning: This article is general information only. It doesn't take your personal circumstances, objectives or needs into account, so consider your own situation and seek professional advice before making financial decisions. Perfect Score Pty Ltd | Australian Credit Licence 562270 | AFCA member.

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