Affirm Loan Review
Affirm is a company that offers buy now, pay later (BNPL) and personal loans that can help you break up retail purchases at partner and nonpartner stores. However, shopping with a nonpartner store requires an extra (yet easy) step of creating a virtual card. BNPL with Affirm is interest-free, though its long-term personal loans may come with interest.
- 0% financing available: You don’t have to pay interest on BNPL plans, though you’ll have much less time to pay it off — between 30 days and six weeks. This is opposed to Affirm’s interest-accruing personal loan terms of 3 to 48 months.
- No fees: Affirm doesn’t charge its customers any fees, even late fees. However, if you miss any payments, this could impact your credit score.
- Offers soft credit pulls: You can prequalify for a personal loan through Affirm without any impact to your credit score.
- Down payment may be required: Affirm may require you to provide a down payment for certain purchases if you take out a loan. Even the BNPL plan typically requires the first of the four payments upfront when you check out.
-
Smaller loan amounts: Many personal loan lenders offer borrowing amounts up to $50,000. Comparatively, Affirm offers small loans from $35 to $30,000
.Please note that Affirm requires a $10,000 down payment on purchases of $30,000. As a result, it will finance a maximum of $20,000.
- Best for retail shoppers: Affirm can help alleviate the stress that comes with buying a big-ticket item by allowing you to pay over time. Plus, Affirm only uses a soft credit pull to determine your eligibility for BNPL, which means applying won’t ding your credit score.
Affirm pros and cons
Like any lender, Affirm has a mix of benefits and drawbacks you’ll want to consider before taking out a loan. Here’s what you’ll want to consider:
Pros
- 0% financing available for short-term BNPL loans
- No fees
- Checking eligibility doesn’t hurt your credit
- Can finance as little as $35
Cons
-
Won’t work if you need to finance more than $30,000
Please note that Affirm requires a $10,000 down payment on purchases of $30,000. As a result, it will finance a maximum of $20,000.
- May have to provide a down payment
- Won’t know if your purchase is approved until checkout
Affirm loans are unique in that you can choose between a short, 30-day or six-week loan with no interest, or a long-term personal loan with an annual percentage rate (APR) ranging from 0.00% to 36.00% APR.
This company doesn’t charge users any fees, even if you’re late. And while traditional lenders often offer minimum loans of $1,000 to $2,000, Affirm provides small loans — for as little as $35.
On the downside, the mechanics of Affirm can make it a little hard to plan. You’re making a loan application at checkout, without knowing for sure if you’ll be approved. In that moment, Affirm reviews your credit report, payment history and other factors – including consideration of the store where you’re making the purchase. Depending on the circumstances, it could decline you, even if you’ve successfully used Affirm in the past.
Affirm requirements
Besides being the legal age to enter a contract in your state (usually 18), Affirm doesn’t provide much insight into other eligibility requirements. Here’s what we do know:
| Minimum credit score | Not specified |
| Residency requirements | Must live in the U.S. or a U.S. territory |
| Administrative | Must have a Social Security number and a cell phone registered in the U.S. or a U.S. territory |
| Miscellaneous eligibility criteria | Affirm will consider the following details:
|
If Affirm won’t work for your borrowing needs, be sure to shop around for a personal loan that helps you meet your financial goals and can offer you the best-fitting interest rates, loan terms and amounts.
How to get a personal loan with Affirm
Affirm offers multiple ways to break up your payments when you make a purchase. Here’s how each of them works:
Affirm Pay in 4
Your purchase is split into four equal payments, which Affirm will collect every two weeks. You’ll make the first payment upfront during checkout. The Pay-in-4 plan charges no interest or fees, and checking your eligibility won’t hurt your credit score (but late payments will).
30-day plans
Depending on where you’re shopping, you may also be offered a 30-day payment plan option. You’ll make one payment 15 days after purchase, and another at 30 days – no down payment and no interest.
Affirm loan
Affirm loans may be a better option for larger purchases, with payments due monthly. Annual percentage rates run between 0.00% and 36.00%, and terms range from 3 to 48 months.
Virtual card
You can use Affirm to shop with most stores that accept Visa, but you have to create a virtual card first. Go to Affirm’s website or log onto the app to request a virtual card. This will generate a unique Visa credit card number that you then use online like any other credit card, or load into your digital wallet for in-person shopping.
How Affirm compares to other personal loan companies
Even if you believe Affirm aligns with what you’re looking for in a personal loan, it never hurts to shop around and compare other lenders. Here’s how Affirm stacks up against similar personal loan lenders.
| Lender | Affirm | Cash App Afterpay | Klarna |
|---|---|---|---|
| Minimum credit score | Not specified | Not specified | Not specified |
| APRs | 0.00% to 36.00% | 0.00% to 36.00% | 0.00% to 35.99% |
| Loan amounts | $35 to $30,000
Please note that Affirm requires a $10,000 down payment on purchases of $30,000. As a result, it will finance a maximum of $20,000
| Up to $20,000 | No set minimum or maximum |
| Repayment terms | 3 to 48 months for Monthly Payment Plan | 3 to 24 months for Pay Monthly | 3 to 24 months for Pay Over Time |
| Late fees | None | Up to $8 (cannot exceed 25% of purchase) | $7 (can’t exceed 25% of your purchase) |
| Funding timeline | May receive financing within seconds of applying | May receive financing within seconds of applying | May receive financing within seconds of applying |
| Bottom line | Of the three BNPL companies, Affirm offers the longest repayment terms. Unlike Cash App Afterpay and Klarna, it doesn’t charge late fees. | Cash App Afterpay offers similar APRs to Affirm, but the maximum term is only 24 months. There are no late fees on monthly installment loans, but shorter-term loans may incur late penalties. | Klarna offers a similar APR range to Affirm and Cash App Afterpay. It has shorter loan terms than Affirm, and it charges late fees on short- and long-term financing. |
Frequently asked questions
Affirm can be good for small loans. Its underwriting decisions are near-instantaneous, and if you opt for a Pay-in-4 plan, you won’t be charged interest. You are never charged fees. However, borrowers with a spottier credit profile could end up paying high interest rates on monthly plans, and making that decision in seconds at checkout could lead to regrets later.
Compared to a traditional personal loan, it can be easier to get approved for Affirm financing. This is especially true if you are borrowing a small amount. That said, it is possible to get denied – especially for large amounts and if you don’t have your financial ducks in a row.
There can be a downside to using Affirm if you are unable to repay your loan on time. While there are no late fees, Affirm now reports to Experian and TransUnion. Credit scoring agencies like FICO are incorporating BNPL products into new credit scoring models.
Get personal loan offers from up to 5 lenders in minutes