how does booking flights with a 'pay later' option work and what are the typical terms?
booking flights with a 'pay later' option allows travellers to confirm reservations without paying the full amount upfront. the balance is settled through instalments or at a later date, usually within a specified period.
several variants exist. some options function as short-term loans, while others offer structured EMI plans. the terms including tenure, interest, and fees vary significantly by provider and chosen plan.
types of flight pay later options
travel now, pay later (TNPL). this is the travel-specific version of buy now, pay later. travellers book flights and pay the amount within a pre-defined period through instalments. TNPL works even without a credit card, with instant approvals and tenures ranging from a few days to 18 months.
airline-offered fare holds. airlines like indigo allow passengers to lock in a fare for a small fee and complete payment later. indigo's 6e fare hold charges ₹99 for domestic flights and ₹199 for international flights, with hold periods ranging from 6 to 96 hours depending on the departure date. the fare remains locked during the hold period, but the hold fee is non-refundable.
airline EMI partnerships. emirates offers equated monthly instalment (EMI) options through 12 partner banks in India, with repayment tenures from 3 to 36 months. interest rates start at 11.88% and vary by bank. processing fees also differ across banks, with some charging ₹99 and others ₹299.
platform-specific credit options. ixigo credit offers instant credit of up to ₹1 lakh for flight bookings, with options to repay in the next billing cycle or convert into 2- to 3-month no-cost EMIs. the eligibility check is instant, and no credit card is required.
EMI card solutions. products like the Bajaj Finserv insta EMI card allow flight bookings without a traditional credit card. eligibility requires a CIBIL score of 720 or above. tenure options range from 3 to 60 months, with easy EMI (no interest, merchant absorbed) and standard EMI (13% to 16% per annum) options available.
key terms to understand
interest rates. rates vary widely. some TNPL options offer no-cost EMI for shorter tenures (typically 3 months), while standard rates range from 11.88% to 24% per annum. spicejet's pay later option charges 24% annually for tenures beyond 3 months.
processing fees. a one-time fee may apply. for emirates, fees range from ₹99 to ₹299 depending on the bank. for the Bajaj EMI card, processing fees range from ₹0 to ₹199.
tenure. repayment periods vary from a few days (fare holds) to 36 months (EMI options). the typical TNPL tenure is 12 to 18 months, with no-cost EMI usually limited to 1 to 6 months.
credit impact. most pay later options are recorded on the credit report as a loan or credit line. missed payments can attract penalties and damage the credit score.
minimum transaction amount. some providers have minimum booking values for EMI eligibility. spicejet requires a minimum of ₹900 and a maximum of ₹40,000. most platforms require ₹3,000 to ₹5,000 for EMI eligibility.
eligibility. TNPL options typically require a valid permanent account number (PAN) number, Aadhaar, and minimum monthly income of ₹10,000 to ₹15,000. a CIBIL score of 670 (experian) or approximately 630 (CIBIL) improves approval chances.
what to check before using pay later for flights
total cost. add up all charges: interest, processing fees, and goods and services tax (GST). a no-cost EMI may have no interest but may still include processing fees. a lower EMI with a longer tenure often costs more in total interest.
repayment timeline. know when the first payment is due and how many instalments will follow. for fare holds, payment is due within the hold period.
cancellation policy. understand what happens if the flight is cancelled. for spicejet's pay later, cancellations require contacting the lender (axio) for refunds, not the airline.
prepayment charges. some options allow early closure without penalty. spicejet and Bajaj EMI card have no pre-closure fees. others may charge a percentage of the outstanding principal.
credit score requirement. check the minimum score before applying. Bajaj EMI card requires 720 or above. some non-banking financial companies (NBFCs) accept thin-file or new-to-credit customers.
frequently asked questions
1. does booking flights with pay later require a credit card?
many travel now pay later (TNPL) options and EMI cards work without a credit card. instant approvals are often available with just a mobile number, PAN, and Aadhaar.
2. what are the typical interest rates for flight pay later options?
rates range from 0% (no-cost EMI for short tenures) to 24% per annum for longer tenures. airline EMI partnerships start at 11.88%, while NBFC options may charge 13% to 16%.
3. how long is the repayment tenure for flight pay later?
tenures vary by provider. fare holds last a few hours to 4 days. TNPL options typically offer 3 to 18 months. airline EMI partnerships can extend to 36 months.
4. does using pay later for flights affect the credit score?
most pay later options are recorded on the credit report. timely payments can build credit history, while missed payments can lower the score and attract penalties.
5. what happens if the flight is cancelled after using pay later?
the refund process depends on the provider. for some platforms, refunds go to the lender first, not the traveller. checking the cancellation and refund policy before booking is essential.
