Guide · 8 minute read

Buy now, pay later in Pakistan: how it affects your budget

By Muhammad Ishaq · Last updated: 6 November 2026

A new phone for "only Rs 6,000 a month". A fridge on easy instalments. Four small payments at checkout in an app. Buying now and paying later has become normal in Pakistan, online and in shops.

Used carefully, instalments can spread a big cost. Used carelessly, they fill next month's budget before your salary even arrives. This guide explains how the main types work, how to find their real cost, and how to keep them under control.

Buy now, pay later at a glance

Type	How it works	What it can cost	Watch out for
BNPL app at checkout	The price is split into a few payments, often over weeks or months	Sometimes no markup; may have service or late fees	Late fees, and several plans running at once
Shop or dealer instalments	Pay a deposit, then monthly instalments for 6 to 24 months	A higher total price than paying cash	The total you pay, not the monthly amount
Salary deduction through your employer	The instalment is taken from your pay before it reaches you	Varies; can be interest-free or include markup	Less take-home pay for months; hard to stop
Credit card instalment plan	A card purchase is turned into monthly payments	Markup or a processing fee	Card interest if you miss a payment

The short answer: an instalment is a loan, whatever it is called. Treat every one as a fixed bill in your budget until it is paid off.

How BNPL and instalment purchases work

BNPL apps

In Pakistan, buy now, pay later companies that are not banks are regulated by the Securities and Exchange Commission of Pakistan (SECP) as non-bank finance companies. SECP's Circular 12 of 2024 allowed licensed digital lenders to offer BNPL, as reported by Dawn and Business Recorder in May 2024. SECP also publishes a list of approved lending apps, including BNPL apps.

Shop and dealer instalments

Many shops and dealers sell phones, motorbikes, appliances and furniture on monthly instalments, often with a deposit first. A guarantor, cheques or a copy of your CNIC may be required. For smartphones, Business Recorder reported in November 2026 that a regulatory framework for phone financing had still not been finalised.

Salary deduction

Some employers arrange purchases, such as a motorbike or appliances, or salary advances, and take the instalment straight from your pay. It's convenient, but your take-home pay drops until the last instalment, and you can't easily pause it if money is tight.

Work out the real cost

The monthly amount is designed to look small. Always compare the total you will pay with the cash price.

Worked example

A phone costs Rs 60,000 in cash. A shop offers it at Rs 6,000 a month for 12 months (an example, not a real offer).

Total paid: Rs 6,000 × 12 = Rs 72,000.
Extra cost: Rs 12,000, which is 20% of the cash price.
Because you repay a little every month, you only have the full Rs 60,000 of credit at the start. Worked out as an annual rate, this deal costs about 35% a year (our calculation: the rate at which 12 payments of Rs 6,000 are worth Rs 60,000 today).

So "20% extra" is really closer to a 35% loan. For comparison, the State Bank of Pakistan's policy rate was 12% in November 2026.

Fees to look for

Processing or service fees at the start
Late-payment charges, sometimes per day
Insurance or "protection" added to the price
Advance cheques or a guarantor's liability if you miss payments

What the rules say

SECP's rules for digital lenders, as reported by Business Recorder, include:

A Key Fact Statement before you borrow. It must show the amount, annual percentage rate, tenor, instalment dates and all fees, including late-payment charges, in English and Urdu. A fee that isn't in the Key Fact Statement can't be charged.
No upfront deductions from the approved amount.
No access to your contacts or photo gallery, even if you agree to it.
For short-term digital nano-loans, Dawn reported in October 2023 that total charges can't exceed the amount borrowed and the annual rate can't exceed ten times the SBP policy rate.

For banks, the State Bank of Pakistan's consumer-finance rules (as set in 2021) say total monthly instalments on consumer financing should not exceed 40% of a borrower's net disposable income. Shop and dealer instalments are often outside these rules, so read the agreement carefully.

Before using any app, check that the company is on SECP's list of licensed lenders.

How instalments affect your budget

Each instalment is a fixed bill for months. Three small plans of Rs 4,000, Rs 6,000 and Rs 5,000 add up to Rs 15,000 a month, which can be a fifth of a Rs 75,000 salary.

Add every instalment to your budget as a fixed cost, like rent.
Keep the total small. A simple rule of thumb: keep all instalments, including any car or bike loan, well below the 40% the State Bank uses for bank lending. Lower is safer.
Watch salary deductions. Plan your budget on the pay that actually reaches your account.
Don't use instalments for daily costs such as groceries or bills. If you need to, that is a sign the budget needs fixing first.

See how instalments fit at your income in our monthly budget plans.

How to use BNPL safely

Ask for the cash price and the total price, and work out the difference before you sign.
Read the Key Fact Statement or agreement, especially late fees.
Use one plan at a time. Finish one before starting another.
Set the instalment to be paid on payday, so it is never late.
Wait 24 hours before any non-essential purchase. Our guide to stopping impulse spending has more ideas.
Consider saving first. Saving Rs 6,000 a month for ten months buys the Rs 60,000 phone in cash, Rs 12,000 cheaper than the instalment deal, and the savings earn a little profit on the way. A committee or savings account can help.

If instalments or card debt are already too much, list them all and clear the most expensive first. Our guide to paying off credit card debt explains how.

Frequently asked questions

Is buy now, pay later regulated in Pakistan?

BNPL companies that are not banks are regulated by SECP as non-bank finance companies. SECP's Circular 12 of 2024 allowed licensed digital lenders to offer BNPL. Banks follow State Bank of Pakistan rules. Check that any app is on SECP's list of licensed lenders.

Is BNPL interest-free?

Some plans have no markup if you pay on time, but many include a higher price, service fees or late charges. Compare the total you will pay with the cash price. A 20% extra cost over 12 months works out at about 35% a year (our calculation).

What is a Key Fact Statement?

A summary that SECP-licensed digital lenders must give you before you borrow, showing the amount, annual rate, tenor, instalment dates and all fees, in English and Urdu. Any fee not listed in it can't be charged.

How much of my salary can go on instalments?

For bank consumer finance, the State Bank of Pakistan's 2021 rules cap total monthly instalments at 40% of net disposable income. For a household budget, aim much lower so rent, food and savings still fit.

Is it better to save up or buy on instalments?

Saving first is almost always cheaper. In our example, Rs 6,000 a month for 12 months costs Rs 72,000 for a Rs 60,000 phone, while saving the same amount for ten months buys it outright.

Related guides

Sources

This guide is for general education only. It is not financial, tax or legal advice. Figures are examples or general guidelines; check what applies to you.