PayPal Pay in 4: 2023 Review
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Our Take
4.0
PayPal offers a pay-in-four with zero interest, no fees and purchase protection, but it lacks some consumer-friendly features.
Pros & Cons
Pros
- Offers zero-interest loans.
- No fees.
- Offers monthly financing.
- Includes purchase protection for eligible purchases.
Cons
- Available for online shopping only.
- No option to reschedule payment.
- May send past-due borrowers to collections.
- No option to suspend payments while awaiting refund.
Full Review of PayPal
PayPal offers a “buy now, pay later” payment plan for online purchases at major retailers like Apple, Home Depot and Best Buy.
Known as PayPal Pay in 4, it lets you divide a purchase into smaller installments with zero interest and no fees. PayPal also offers monthly financing with longer terms, though these loans charge interest.
PayPal Pay in 4 at a glance
Loan amount | $30-$1,500. |
Payment structure | Pay-in-four plan. |
Interest | 0%. |
Availability | Online purchases only. |
Conducts soft credit check | Yes. |
Minimum credit score | None. |
Late fee | No late fee. |
Other fees | No other fees. |
Option to reschedule a payment | No. |
Pauses account when payment is missed | No. |
How does PayPal Pay in 4 work?
PayPal’s Pay in 4 splits the total price of an order into four equal installments, due every two weeks, with the first payment due at checkout.
For example, if your total is $300, you’ll pay $75 at checkout. Then, you’ll have three remaining payments of $75, due every two weeks until you’ve paid in full. PayPal doesn't charge interest for using its plan.
Payments are automatically billed to the debit, credit card or bank account used during checkout. You can also use your PayPal balance to make payments.
PayPal doesn't charge fees for using its product.
PayPal also offers monthly payment plans for larger purchases up to $10,000, with repayment terms of 6, 12 or 24 months. These loans charge interest, ranging from 9.99% to 29.99% annual percentage rate. Rates as low as 4.99% may be available.
Is PayPal Pay in 4 a good idea?
Whether you should use PayPal Pay in 4 depends on your specific financial situation. Weigh the pros and cons below to decide if it’s the right fit for you.
Where PayPal Pay in 4 stands out
Zero-interest loans: PayPal’s Pay in 4 divides the total cost of your purchase into smaller installments for zero interest, which can help you pay for an essential purchase you can’t afford outright. It’s hard to find credit for zero interest, especially if you have a fair or bad credit score (689 score or lower).
No fees: PayPal is one of just a few BNPL providers that charge zero fees, including no fees for late or missed payments. Fees increase the cost of your purchase, but with PayPal's combination of no interest or fees, you don’t pay anything extra to use its product.
Purchase protection: PayPal extends its purchase protection program to Pay in 4 purchases, so if you don't receive your item or it differs from its description, you may qualify for reimbursement from PayPal. This is a unique feature among BNPL providers that may help give shoppers peace of mind when shopping online.
Data security: According to an investigation by Consumer Reports, reported in May 2023, PayPal ranks highest among BNPL providers for its policies and practices regarding privacy, transparency and security. Consumer advocates have cited management of user data as a growing concern in the industry.
Where PayPal Pay in 4 falls short
Online shopping only: PayPal’s Pay in 4 is available for online purchases only. Almost all BNPL providers offer plans that work both online and in stores.
Can’t reschedule payments: If you’re short on cash for an upcoming installment, PayPal won’t let you reschedule the payment due date, which most BNPL providers do at least once per order. It also won’t pause your account after a missed payment, which can keep debt from spiraling further.
May send borrowers to collections: PayPal may send past-due borrowers to collections if they fall behind on their loans. Although it’s still unclear how BNPL debt is incorporated into credit reports, collection activity generally hurts scores.
No option to suspend payments: Unlike other BNPL providers, PayPal doesn’t suspend payments while a refund is being processed. That means if you return an item purchased with PayPal, you’ll need to keep making payments on your Pay in 4 loan until the refund is processed.
What to know about 'buy now, pay later'
You can now use “buy now, pay later” to check out at most retailers. The type of payment plan — and whether it charges interest or fees — depends on the BNPL provider, so it’s important to pay close attention to the loan terms you’re offered at checkout.
For some users, BNPL is a smart way to break up a purchase, especially if you get a zero-interest offer and are positive you can afford the installments. Getting approved may also be easier compared with credit cards or loans because there’s no minimum credit score requirement.
But BNPL is still a form of debt, and there are risks. The Consumer Financial Protection Bureau released a study in September 2022 raising concerns about inconsistent consumer protections, the ease of debt accumulation and overspending, and data harvesting and monetization. Another CFPB study from March 2023 identified BNPL users as more likely to show signs of financial distress.
BNPL pros | BNPL cons |
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NerdWallet recommends using BNPL for necessary expenses only. Though BNPL can be a convenient and low-cost payment option, you’re still taking on debt, and it’s rarely a good idea to go into debt for a nonessential purchase.
How to get approved for PayPal Pay in 4
To be eligible for PayPal Pay in 4, you’ll need to be at least 18 years old in most states. You must also have a PayPal account in good standing or be willing to open a PayPal account to apply.
PayPal Pay in 4 isn't available if you live in Missouri or Nevada.
Approval decisions are instantaneous and may depend on a few factors, like information from the credit bureaus and any past usage or history with PayPal.
Does PayPal check credit?
PayPal will conduct a soft credit pull when you apply for a payment plan. This doesn't affect your credit score, and there is no minimum credit score requirement to use PayPal.
How does PayPal compare?
PayPal’s Pay in 4 is similar to the pay-in-four plans offered by Apple and Affirm, which come with zero interest and no fees. Like PayPal, Afterpay also offers monthly financing for online purchases, but with the possibility of zero interest.
Interest | Terms | Fees | |
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Affirm |
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Afterpay |
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Apple Pay Later |
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Klarna |
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PayPal |
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Sezzle |
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Zip |
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» COMPARE: The best buy now, pay later apps
How to get PayPal Pay in 4
Download the PayPal app
Users can download the PayPal mobile app to get started. You can shop directly in the app or use it to manage repayments.
Shop with PayPal online
You may also see the option to check out with PayPal at some retailers. If the purchase is eligible for Pay in 4, you’ll fill out a short application and receive an instant decision.
Alternatives to PayPal Pay in 4
If you have good or excellent credit (690 credit score or higher), you may consider a 0% APR credit card. These cards offer introductory periods of up to 21 months and charge no interest during that period. You may also receive a sign-up bonus or access to a rewards program.
If you’re looking to fund a large, essential purchase, you could apply for a personal loan. Personal loans have fixed interest rates and longer repayment terms, and there are options for borrowers with fair or bad credit (689 credit score or lower).
You can pre-qualify with NerdWallet below to see your loan options. Pre-qualifying doesn’t affect your credit score.
Find the Best Personal Loan
NerdWallet’s review process evaluates and rates “buy now, pay later” (BNPL) loan products from the top financial technology providers. We collect over 40 data points from each lender, verify the information with company representatives and compare the lender with others that seek the same customer or offer a similar BNPL product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to BNPL providers that offer consumer-friendly features, including: soft credit checks to pre-qualify, zero interest and minimal fees, transparency of rates and terms, flexible payment options, accessible customer service and built-in borrower protections. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
This methodology applies to classic BNPL loans, which divide payment into four equal installments, typically due over six weeks. Some providers offer other loan products with longer terms, which is factored into the rating process. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for buy now, pay later and our editorial guidelines.
