Perpay review: Buy-now, pay-later site to build credit

Pros

• Qualify with a full-time job
• No fees
• No credit check

Cons

• Shopping limited to partner retailers
• Items may only ship after first payment made
• Must pay with direct deposit from your paycheck

What you need to know about a Perpay personal loan

Perpay is an e-commerce marketplace that lets you pay for purchases in installments. There’s no credit check, and users can even build credit with automatic withdrawals from their paychecks, since on-time payment history is reported to the credit bureaus.

Purchases can only be made within the Perpay marketplace (online or via the app) — but the marketplace includes more than 1,000 popular brands.

Build credit by paying automatically over time

After making a purchase with Perpay, you’ll pay for it over time in installments through small, automatic withdrawals each payday, set up via direct deposit from your paycheck. As you pay back your purchase on time, you can build credit — that’s because Perpay reports up to 24 months of payment history to the three major consumer credit bureaus, Equifax, Experian and TransUnion.

To qualify for credit building, you’ll need to activate the option through your account dashboard or when checking out for your first purchase, and you’ll need to make at least four months of on-time payments worth at least $200. It’s important to note that credit is based on several factors, and on-time payments won’t remove negative credit history from your reports. Failure to make payments can negatively affect your credit, whereas on-time payments can positively influence it.

Not upfront about all shopping options

Perpay only offers a preview of the stores and retailers that you have access to in its marketplace, including names like Apple, KitchenAid and Samsung. In order to see the full range of options, you’ll have to create an account.

Delayed shipping

Perpay often requires one full payment to be made before shipping your items. This will generally occur at your next payday, because your payments are withdrawn directly from your paycheck after you set up direct deposit.

Some purchases, such as TVs, large household appliances, mattresses, etc., will require you to schedule delivery details. These will be delivered via freight shipping and it could take longer to get tracking information. All other purchases should give you an email with tracking information within three to five days of your first payment.

A closer look at Perpay

Perpay boasts a quick approval process and doesn’t require a credit check. Instead, full-time employment and income are used to determine a credit limit (what Perpay calls a spending limit). Here’s Perpay’s spending limit breakdown.

• Estimated spending limit — The amount you’re initially approved to spend when placing your first order. This is subject to change.
• Approved spending limit — The amount you’ve been approved to spend after review of your profile and Perpay payment history. This can go up as you establish a history of on-time payments or your income increases.
• Available spending limit — Your approved spending limit minus any outstanding balance you have from previous purchases.

Perpay also has a referral program that allows you to invite others and receive credits to your account, increasing spending power. But that option likely isn’t as important for most Perpay users as the ability to pay for big purchases while using the program to build a credit history of on-time payments. On its website, Perpay claims that some users may see credit score improvement in as little as four months.

Who is Perpay good for?

Perpay is best for those who want to shop, while building credit, and who meet or exceed the following basic requirements for an account:

• Have a full-time job
• Have at least three months of income
• Be able to set up direct deposit payments
• Have no active bankruptcies
• Be in good standing with existing debt obligations
• Have a compatible mobile phone (to use the app)

The buy-now, pay-later marketplace could be helpful if your credit isn’t great and you want to regularly pay for your purchases in installments rather than a lump sum. If you’re looking for a way to finance just one significant purchase or expense, such as for home improvements or medical bills, you might consider a personal loan instead.

How to apply with Perpay

Just as you would if you were applying for a loan, you should have your financial and personal information handy to expedite the process. To complete your Perpay profile, you’ll need current income information, like from a recent paystub. This is how Perpay determines your spending limit.

Once you complete your profile you can browse the marketplace and add items to your cart. Submit your cart for review to receive approval and a personalized spending limit. Once you’re approved, you’ll be contacted with instructions on how to make future payments. Items are shipped upon first payment from your paycheck via direct deposit.

Not sure if Perpay is right for you? Consider these alternatives.

Perpay is a good example of how online buy-now, pay-later solutions can make big purchases more accessible for some people. But Perpay is not the only option to choose from and might not be the right option for you. You can also split payments with similar services. Here are two other options to keep in mind.

• Affirm: A pay-at-your-own-pace app, Affirm makes it easier to shop by selecting payment schedules. Be aware that you might have to pay interest with Affirm, based on your credit.
• Splitit: Splitit is a buy-now, pay-later service that utilizes your existing credit lines without charging additional interest.

Keep in mind that Perpay is just one tool you might consider if your goal is to build or rebuild your credit. Other options to help improve your credit health include bad credit loan options, loan consolidation or a secured loan/line of credit.