This Is the Fastest Way to Pay Off 'Buy Now, Pay Later' Purchases

Buy now, pay later (BNPL) has quickly become a popular way for many people to pay for everything from new furniture to vacations. Nearly half of U.S. adults have used a BNPL plan at least once, allowing them to pay for a purchase over installments.

However, the downside of BNPL is that some people carry their loans for too long and can sometimes miss payments, which can potentially result in high interest and late fees. Data from Statista shows that 13% of BNPL users have had to pay extra fees or interest on their buy now, pay later plans.

Here's how to tackle your BNPL debt quickly so you can get your personal finances back on track.

The fastest way to pay off BNPL purchases

Without question, the fastest way to knock out your buy now, pay later debt is to use money from your savings account to pay off the total amount immediately. Paying off the entire balance will ensure you don't incur any late payment fees and will also keep you from accruing any additional interest on the amount you owe.

While this strategy is straightforward, it's also difficult to pull off.

The latest survey from The Motley Fool Ascent shows Americans' median savings account balance is $1,200, which means it could be financially strenuous for some to pay off their BNPL purchases immediately.

But if you have enough money in your savings account to cover your BNPL total, consider using it. Sure, it'll leave you with less available cash, but you can set up monthly automatic deposits for the same amount that would otherwise go to your BNPL payments to quickly rebuild your savings.

Two additional ways to pay off your BNPL purchases quickly

If you don't have the cash on hand to immediately pay off your buy now, pay later purchases, here are a couple suggestions to help you tackle the debt fast.

1. Make larger payments

This may be the simplest way to pay off your BNPL purchase faster. With this strategy, you pay more on your installment payments than required. For example, if you pay $100 monthly for your installment plan, you could pay $125 instead. Doing that four times will equal the same amount as one additional payment.

2. Use the debt snowball method

Using the debt snowball method could be helpful if you need to pay off multiple BNPL purchases. This debt payoff strategy focuses on paying off your smallest debts first, then works up to the large ones.

Let's say you have two BNPL accounts. One monthly payment of $25 goes toward a $500 balance you owe for a new phone. The other is $75 per month toward a $1,500 balance for a new sofa. With the debt snowball method, you make extra payments toward the $500 phone first and pay it off as soon as possible.

Once it's paid off, you add the monthly $25 phone payment to the $75 monthly sofa payment so you're paying $100 per month for the sofa. Putting an extra $25 per month toward the sofa will help you pay off that balance faster and get you out of debt quicker.

While it can be overwhelming to have BNPL balances, the first step toward getting rid of them is confronting the problem and coming up with a solution. Creating a budget can help you manage your monthly expenses and help you discover areas where you might be able to cut back on spending and put the extra cash toward your buy now, pay later accounts.

And if you need extra help managing your debt, including BNPL accounts, check out some helpful tips for how to pay off debt.