A new Protect Borrowers study found 37% of BNPL loans carried interest in 2026, up from 16.5% in 2021, undermining the industry's interest-free image.
Fees add to the cost: Sezzle can charge up to $2 upfront, $17 for late payments and $7.50 to reschedule, while advocates say checkout options can steer shoppers into pricier installment loans.
Affirm said 71% of its loan merchandise volume carried interest, and a filing showed 87% of its monthly installment-loan volume bore interest in early 2026; Klarna was criticized for highlighting the lowest monthly payment rather than the cheapest option.
Consumer risk appears concentrated among strained households: 46% of U.S. BNPL users used it for groceries, 40% for other debts, and 23% of renters used BNPL versus 13% of homeowners.
Regulation remains limited after the Trump administration withdrew a Biden-era CFPB rule that would have treated BNPL providers like credit card networks, leaving advocates to press for broader disclosure and consumer-protection standards.