How does Sezzle Canada compare?

• Launched in 2019, Sezzle has more than 1.5 million customers in the US and Canada.
• Available at 1,000+ stones across Canada, and growing rapidly.
• Is Sezzle the buy now pay later service that best suits your needs?

Are you staring at that new running top in the store window, wishing you had the cash in your bank account to take it home with you? With Sezzle Canada, it can happen.

Founded in 2016, Sezzle Canada is a leading fintech providing consumers with point-of-sale installment loans. With Sezzle, you can "buy now pay later" (BNPL), giving you the opportunity to finance your purchases with more than 30,000 partner retailers.

So is Sezzle right for you? Find out with our comprehensive review.

How does Sezzle work?

Sezzle Canada is available to Canadians looking to finance their purchases at point-of-sale. Sezzle lets you buy it now and pay off your purchase in four easy installments, two weeks apart. Sezzle doesn't charge you any interest on your loan, and you don't need to pass a credit check to access the financing.

When you make your purchase, you'll pay your first installment at checkout and then split the remaining balance over three easy payments, two weeks apart from each other. Sezzle offers you a credit limit of $2,500 to spend on purchases. However, you might not get access to the full amount on your first purchase. As you show good faith in your loan payments, Sezzle may increase your credit limit.

If you take a loan with Sezzle and think you won't make your payment deadline, the company offers you one free change to your payment date. If you need further changes, you'll have to pay a $5 penalty fee, and you get three reschedules in total.

Miss that payment date, and you'll have to pay Sezzle a $10 late fee, and they move your outstanding balance to your next payment date. Late payments also limit your credit facility with Sezzle, and you won't be able to take any new loans until you settle your account.

If you're using the "Sezzle Up" account, the company reports your payment activity to the credit bureaus. Pay on time, and it boosts your credit score, while late payments are likely to damage your creditworthiness.

Who is Sezzle for?

Only Canadian residents may apply for the service in Canada, and you need to be at least 18 years old to open an account and take out a loan.

The service targets millennials and zoomers (Gen Zs) that want to get financing on purchases but might not have a credit card due to limited payment or credit history with banks. This demographic are also attracted to the short duration of these installment plans, seeing them as a way to keep their spending — and debts — under control.

You'll also need to have a valid email address, phone number, and a bank account, debit, or credit card to link to your Sezzle account to make payments. Sezzle gives you an interest-free loan you can use to make purchases with its network of retail partners in Canada.

Does Sezzle affect your credit score?

When you sign up with Sezzle and decide to take a loan, the company runs a "soft" credit check in your name to verify your identity. However, it's important to note there's a significant difference between "soft" and "hard" credit checks.

With a soft credit check, you won't see any change in your credit score. The banks also don't see your loan on your credit report. Therefore, it won’t have any impact on your lending facilities with banks or other financial institutions unless you have to disclose it as part of an application.

With a "hard" credit check, you'll see the inquiry appear on your credit report, and the banks will too if they pull your report.

Sezzle doesn't update the credit bureaus with your payment activity unless you are using "Sezzle Up". That has its good and bad side. The good side is that there's no impact on your credit score if you default on your loan or make a late payment. Conversely, paying your account off on time doesn't improve your credit score. That's not good news for anyone trying to build their credit with the bureaus and banks.

Where can Sezzle be used in Canada?

Sezzle has over 1,000 retail partners in Canada, and more than 30,000 partners globally, with more joining the list every day. Some of the most popular retailers accepting Sezzle as a form of payment include the following.

• Cakeworthy – Streetwear for men and women.
• Canada Drugs Direct – Wellness supplements and drugs.
• Caribou Kids – Kids clothing.
• Casca – Women's clothing.

Next time you're checking out with your favourite retailer, check to see if they accept Sezzle. A full listing is available to browse on Sezzle's website.

Sezzle vs. credit cards

Sezzle offers an alternative to putting your purchases on a credit card. Banks don't like it when you use more than 30% of your credit facility, and maxing out your card can reduce your credit score.

By financing with Sezzle, you leave your credit card open to finance important, big-ticket items or emergencies. Since there's no APR with Sezzle, you get interest-free loans.

Perhaps the biggest attraction to Sezzle is the fixed nature of repayments. Credit cards may be handy — perhaps too handy — and many people struggle to keep their spending in check. Knowing that a Sezzle purchase will be repaid within four payments is attractive for those of us who struggle with financial discipline.

Pros and cons

Alternatives

• Afterpay: This Australian fintech provides point-of-sale BNPL loans for Australians, Canadians, and Americans. You get interest-free loans using the same “Pay in 4” model as Sezzle and PayBright. Afterpay has a huge network, with over 48,000 retail partners in the US, Australia, and Canada.
• Affirm: This American buy now pay later firm specializes in point-of-sale loans of up to $17,500 for purchasing big-ticket items. You have the option of three, six, or twelve-month installment plans.
• PayBright: Canada’s leading buy now pay later firm with options to "Pay in 4" or "Pay Monthly". There's no interest charged on “Pay in 4” loans, but there is APR on the "Pay Monthly" account. US BNPL firm, Affirm, recently acquired PayBright in a C$340-million deal in early January 2021.

FAQs

How can you fund your Sezzle account?

When you sign up with Sezzle, you link your bank account, debit, or credit card to your account. You can customize your payment method to suit your needs.

Can you pay off Sezzle earlier than scheduled?

After taking your loan, you have the option of settling your account in full at any stage. There are no penalty fees for paying off your outstanding balance early.

How do I close my Sezzle account?

Open your Sezzle account and navigate to the "account" tab. Click on the "personal information" tab, and you'll see the option to close your account at the bottom of the page.

Does Sezzle charge interest?

Sezzle charges no interest on your loan. Sezzle only charges you a late fee if you fail to adjust your payment date (one free change per transaction). You also have penalty fees involved if you need to change your payment date more than once.

Can I increase my Sezzle credit limit?

You have the option of upgrading your account to “Sezzle Up” to access a larger credit facility. However, if you decide to take this option, Sezzle will begin reporting your payment activity to the credit bureaus. If you pay on time, this action boosts your credit score. However, if you miss payments, it can damage your creditworthiness.

How does Sezzle make money?

As a buy now pay later (BNPL) vendor, Sezzle earns money through a merchant partner network, where the merchant pays a fee to Sezzle for processing the transaction. The company doesn't charge you interest, but it does charge penalty fees on late payments. Penalty fees often make up a significant portion of BNPL revenues.