I haven't used IRCTC Pay Later service but I have used Amazon Pay Later service in this service main company i.e. IRCTC or Amazon working as a co-ordinator between lending company and borrower.
By using this service you will pay through this option and after certain period of time like credit card your monthly bill will be generated and payment on or before due date there is no extra cost will be taken. But if you miss out to pay your full amount then they will charge high interest rate on the outstanding balance.