18% youth in America could not repay in 2021, impact on CIBIL score

In America, youth are drowning in debt due to the Buy Now Pay Later (BNPL) scheme. Due to this, his CIBIL score is also getting worse. According to a Federal Reserve report, 18% of consumers between the ages of 18 and 29 could not repay loans in 2021. 11% gave at least one installment late. After Corona, there has been a rapid increase in such companies giving small loans. In the greed of interest-free loans on attractive and easy terms, youth are buying more than their salary. According to a survey by the Financial Technology Association, 4% of BNPL users borrow from multiple companies.
People spend more than a third of what they spend. Because of this, they are unable to repay the loan. Something similar happened with 18-year-old Sarah Pefferle from Chicago. Sara had put aside some money to buy the house, but she started buying many items under the scheme. Because of this everything was ruined. Sara had taken a loan of about Rs 4 lakh from Ballooning Balance Company to repay it in 3 installments in two months. The company added more medical costs to it than expected. This increased this amount many more.
When he talked about this, the financial advisor advised him to close the account, but by that time his credit score had dropped from 720 to 580. Now she will not be able to fulfill her dream of buying her house for two years.
According to the Consumer Financial Protection Bureau report, 5 BNPL companies gave loans of about Rs 2 lakh crore to 18 crore people in 2021. Which is 10 times more than in 2019. At the same time, some people say that people taking loans are not able to know the hidden disadvantages of BNPL.