Sezzle Review: An Updated Take on Buy Now, Pay Later

Bottom line: Sezzle is a payments app that offers interest-free loans, payable in four installments over six weeks.

At a glance

What is Sezzle and how does it work?

Sezzle is a payments app that offers interest-free loans that allow you to shop online at participating merchants, buy what you want, and pay off your purchases with four installment payments over six weeks.

If you know you're going to use Sezzle to make a purchase, you have the option of shopping through its app or website, or directly through a merchant's online site. Say you make a $100 purchase. The first installment is typically 25% of the total purchase price, or $25. The next three installments will also be for $25 until the debt is repaid in full.

Applying for a Sezzle loan won't impact your credit score because the company runs a "soft" credit check. If you've used Sezzle before and had trouble making payments or run into another issue, it is possible you won't qualify for a loan. However, Sezzle offers an instant answer regarding your application so there's no waiting around to hear back.

The company also offers a program called "Sezzle Up" that allows you to opt into credit bureau reports. What this means is that Sezzle reports your payment history to the big three credit bureaus -- Experian, TransUnion, and Equifax. By making each payment on time, Sezzle Up gives you the opportunity to build (or rebuild) your credit history.

As a new customer, you may have a lower-than-expected credit limit available. Over time, with a steady history of payments, the credit limit will increase.

While Sezzle does not charge interest on its loans, they may tack on fees in certain situations. Let's say you make a payment using your debit card and the payment fails. The company will give you 48 hours to correct the problem, either by making sure there's enough money in your bank account to cover the payment or making the payment in another way. If you fail to correct the problem within 48 hours, Sezzle may charge  $10, depending on where you live (fees are not permissible in some areas).

When you first take out a loan, you agree to a specific repayment schedule. Sezzle allows you to reschedule one of those payments for free. It charges a $5 fee for each additionally rescheduled payment.

If payment fails, you'll be restricted from placing a new order until you've settled the matter.

Top perks

With the Sezzle app, you're able to make purchases now and pay for them later. Here are other top perks associated with Sezzle.

Ability to buy now

Sezzle makes it possible for you to make a purchase now with 25% down. If you're good with a budget and paying bills on time, Sezzle represents a nice way to take out an interest-free loan.

No interest

No-interest loans are practically unheard of. As long as the debt is repaid within six weeks, a Sezzle loan is essentially the same as cash.

Chance to build credit

Enrolling in Sezzle Up means the company will report your payment history to the three credit reporting agencies, which provides an excellent way to build credit without incurring interest, fees, or debt (as long as all payments are made on time).

What could be improved

Like most things in life, the app has room for improvement. Here are a few issues that could be addressed.

Limited customer service

According to Sezzle customers, it's difficult to reach anyone from Sezzle when the need arises. The company recommends contacting support with complaints and concerns via an online email form. If you have a problem with your account or serious issue with a merchant, this arms-length approach to customer service may be frustrating.

Available through a limited number of merchants

There are at least 9.1 million retailers online, with 2.5 million based in the U.S. Sezzle is available through roughly 40,000 online merchants. While 40,000 is a decent number, it's a drop in the ecommerce bucket.

Refunds through merchants only

All returns, exchanges, and canceled orders must be handled directly through the merchant, meaning the level of customer service you experience will depend on the merchant in question. If you run into a situation Sezzle labels as disputable, you can open a dispute ticket and they may get involved.

If you want an app that charges a lower late fee: Afterpay is an alternative that also offers interest-free loans but charges an $8 fee rather than $10 for dishonored payments. And like Sezzle, there's no need to worry about a hard credit check dinging your credit score. But you may want to stick with Sezzle if you need a company that will report your payment history to the credit reporting agencies.

If you want an app that allows you to shop wherever Visa is accepted: Zip (formerly QuadPay) is an alternative that also provides an interest-free, six-week loan. It also conducts a soft credit check, helping protect your credit score. But you may want to stick with Sezzle if you want to avoid unnecessary fees. Zip charges a $1 "convenience fee" for each payment made.

The Sezzle app is free to download and free to use. The only potential fees are those you'll incur if a payment does not clear, or you need to change your payment date more than once.

Consumers hoping to build or rebuild their credit scores, and shoppers who are looking to pay off their purchases over time.