How is Deferit different from other BNPL services?

You can use Deferit to pay almost any bill, including your electricity, gas, rego, insurance, school fees, phone and water bills. However, you cannot use Deferit to pay off your credit card bill or make a home loan repayment. If you are renting, Deferit cannot be used to pay your rent.

It's worth noting that, unlike other BNPL platforms, Deferit can only be used to pay bills. You cannot make retail purchases on Deferit, which, according to Deferit, prevents users from making impulse purchases on the platform.

Deferit is a fast and convenient way to pay your bills on time by dividing them into smaller, easily manageable instalments. 

Deferit works like any other BNPL platform (like Afterpay), but for your bills. Once approved, you simply take a picture of the bill you want to pay and upload it on the Deferit app. You must mention the date on which you want the bill paid and then pay Deferit for it in four equal fortnightly instalments. The first instalment is due on the date the platform pays your bill. 

When you sign up on the Deferit platform, you are issued a credit limit, the amount of which depends on the information you provided and your personal account balance at the time of setting up your account. The maximum credit limit allowed on the platform is $2,000. You may be approved for a smaller amount to start with, but your credit limit may increase as you build a repayment history by making your payments on time. However, the government has indicated that the BNPL industry will soon be bound by the same rules and regulations as other credit providers, leading to potential changes in how credit limits are determined.

This means that Deferit and other BNPL providers may no longer have the automatic authority to increase users' credit limits. These changes aim to protect consumers and prevent excessive borrowing that could lead to financial strain.

Overall, Deferit could be a helpful tool to manage your utility bills and budget better, especially during months when your cash flow is a little tight. Still, it’s advisable to read all the terms and conditions and compare other options before signing up to use Deferit or any other BNPL service. One alternative to Deferit you may want to compare is Payright, which could help you pay your quarterly or annual bills up to $1,000.

The bill budgeting platform Deferit claims to have helped over 350,000 Australians pay more than $200 million in everyday bills, helping them save a lot of money in late fees while boosting their savings through early payment incentives. 

However, there are certain situations when you may not be able to use Deferit, such as when you are in bankruptcy or have recent defaults listed on your credit report. Deferit will also run a credit check on you when you upload your first bill to help you defer your payments responsibly. Therefore, poor credit history or a string of recent defaults could prevent you from using Deferit to pay your bills.

Deferit doesn't charge you any interest on your bill payments. It also doesn't charge any establishment fee or late payment fee if you fall behind with your repayments. At the time of writing, all you pay is a monthly subscription of $9.99 for up to $2,000 of balance to pay your bills. The subscription fee is only payable in the months when you have an active bill payment. A card processing fee may also apply.

If you miss your monthly subscription payment, Deferit will not charge you any late payment fee. However, any bills you have scheduled for the month will not get paid until you deposit the subscription fees. 

If you find yourself unable to make a repayment for an active bill on Deferit, it may be possible to reschedule an upcoming payment by a couple of weeks. You could connect with customer support for more information.

Deferit advises that it runs a credit check on you when you upload your first bill to pay. This means a credit inquiry may show up on your credit report, but a single inquiry won't harm your credit score as such. 

However, if there are multiple credit inquiries listed on your file too close to each other, it could give an impression that you are credit hungry or unable to manage your finances. This could be a red flag when a lender assesses any credit application made by you in future. If a lender rejects your application consequently, it will show on your credit file and impact your credit score adversely.

It's worth understanding that even though Deferit is designed as a budgeting tool to help you manage your bill payments better, it is ultimately similar to a form of credit, and must be used responsibly. 

When used correctly, Deferit may help you build your credit score by paying all your bills on time. For instance, Deferit could prove to be useful when an unexpectedly high utility bill comes in, and you don't want to use your credit card. 

Or, if you generally stay on top of your bills, but find yourself stretched out too thin in a particular month, Deferit could come to your rescue, provided you can pay your Deferit instalments on time. However, if you are finding it challenging to make ends meet, using Deferit to pay your bills will not improve your situation. On the other hand, it could make your situation worse and land you in a pile of debt.

Remember, Deferit does what its name says – it helps you defer your bills. However, the bill still needs to be paid by you at the end of the day. If you are having trouble meeting your living expenses, it could be worth reassessing your budget and identifying areas where you can save to improve your cash flow rather than pushing your bills further down the road with a BNPL service. 

If you are struggling financially, you may even consider calling the National Debt Helpline to find a long-term solution to getting your finances back on track.