Afterpay Reports BNPL Users Advised to Close Accounts for Mortgage Approval

The survey, which included 1,000 Afterpay customers, underscores the growing tension between traditional financial institutions and emerging BNPL services. While BNPL platforms have gained popularity for offering interest-free, short-term loans with minimal credit checks, traditional banks appear to be positioning their credit products more favorably by advising potential borrowers to disengage from BNPL services.

Despite BNPL users demonstrating credit scores and repayment records comparable to credit card holders, a perception persists that BNPL users are riskier. This perception has led some financial institutions to recommend closing BNPL accounts as a condition for mortgage approval.

In response to these developments, new legislation effective June 10, 2025, will require BNPL firms to conduct credit checks on borrowers, aiming to enhance transparency and align BNPL services more closely with traditional credit regulations.

For consumers, this situation highlights the importance of understanding how different financial products and services can impact creditworthiness and loan eligibility. It's advisable for individuals to consult with financial advisors to navigate these complexities effectively.

For more detailed information, refer to the original report by Reuters.