Affirm Review – Buy Now, Pay Later But with Options

Name: Affirm Review – Buy Now, Pay Later But with Options
Item: Affirm
Rating: 9

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Last Updated:Apr 06, 2024

Affirm Review – Buy Now, Pay Later But with Options

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Affirm is a tempting service to use, especially if you’re approved for an interest-free option.

9/10

Cost

9/10

Features

9/10

Ease of use

8.5/10

Services

8.5/10

Buy now, pay later is here to stay. Actually, it never really went away, considering that this concept of making a larger purchase and breaking it up into smaller, more manageable interest-free or installment payments has been around for decades.

Affirm is one of many options for consumers to spread payments over time. But just because Affirm is out there and available for use through thousands of retailers, it may not make it an ideal option for everyone. Our Affirm review takes a look at one of the most popular options on the buy now, pay later (BNPL) market today and if it truly benefits the buyer.

What is Affirm?

Affirm is a BNPL company founded in 2012. Fast-forward to today, and it partners with thousands of merchants to provide installment payment options for anyone who needs to make payments over time. It’s an American company based in San Francisco and was founded by Max Levchin, also one of the co-founders of PayPal.

The premise of Affirm is to open up more opportunities for credit and purchases to people who have had challenges with traditional lenders in the past.

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How does Affirm work?

Like other BNPL companies, Affirm is a payment plan option consumers can apply for at checkout at selected merchants. However, the big difference with Affirm is the retailers set the payment terms for the shoppers.

Most merchants are set up to allow you to choose installment payments in 3-, 6-, or 12-month options. You’ll know exactly what terms are available when applying for the installment plan.

Interest rates range from 0% to 30%, but the good news is the interest rate remains fixed and does not compound over the life of the Affirm loan.

Affirm conducts a soft credit check to find out what you qualify for.

How much does Affirm cost?

You do not have to worry about hidden fees. With Affirm, there are no late payment fees, prepayment fees, annual fees, or fees to open or close your installment account.

The cost of Affirm depends on the buyer's interest rate. Affirm has several options, but the cost depends on the buyer's credit history.

Features

Ultra-convenient

Affirm makes it so simple to choose the installment payment option at checkout. It’s also accepted by thousands of merchants nationwide, or you can shop online through the Affirm portal.

Quick approval

Affirm’s approval process is lightning-fast, so you don’t have to worry about standing in the store and waiting while everyone stares at you.

Highly-rated mobile app

The Affirm mobile app gives you even more flexibility when making payments. You can manage your account and make payments in a few simple clicks. It will also hold your virtual card, giving you more options to use Affirm at physical retail locations. Plus, you have access to exclusive deals with Affirm.

0% interest loans available

Affirm offers a program called “Affirm Pay in 4.” This interest-free installment plan allows you to make four payments (one every two weeks).

Works for large purchases

Affirm may be used for purchases up to $17,500, but approval depends on your credit profile and the down payment amount you can afford.

Get pre-qualified without a credit check

Affirm offers you pre-qualification without affecting your credit score using a soft credit pull. By getting a pre-approval, you’ll know how much you’re approved for upfront, and you don’t have to spend the full amount.

Transparent language

Before you agree to use Affirm, you’ll know exactly the repayment terms and the expected payment schedule. Affirm tries to make the entire process as easy as possible, including in its transparent language.

Savings account option

Now, Affirm has a savings account option with no minimum opening deposit required. You can manage this account through the app, too. Like the installment plans, there are no account fees. The APY is variable, and the account currently offers 4.35%.

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Who is Affirm best for?

Someone who doesn’t qualify for a credit card. If you’ve had issues in the past qualifying for a credit card, Affirm may be another option.
If you can get approved for 0%. Avoiding interest payments is always a smart financial decision so if you can use Affirm with the Pay in 4 interest-free option, it can work out better for your wallet.
You’re making a larger purchase. Affirm’s generous purchase amount limit — as high as $17,500 — means you can use the installment plan for large purchases if you need to, subject to your eligibility.

Who shouldn’t use Affirm?

You’re trying to build credit. Affirm does report some installment loans to Experian but it may not help you build your credit since it’s not with all three credit bureaus. Credit reporting with Affirm is not always guaranteed either since it depends on the type of installment plan you have.
You struggle with monthly payments. If you have a hard time keeping up with your financial obligations, adding another monthly payment is probably not the wisest choice. You could fall behind on Affirm payments, and delinquent payments can be reported to Experian.

Pros and cons

Pros

Interest-free payment option in four bi-weekly payments available for some consumers
Quick approval process
Possible option for someone who can’t get a credit card approval because of lack of credit history

Cons

Installment plans may have up to a hefty 30% interest rate
Any interest you’ve paid on a loan won’t be refunded to you if you have to return the item
Payment history may be reported to Experian, depending on the type of loan you have with Affirm

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If you're tight on cash right now, you may want to consider getting a personal loan. A personal loan is a loan that you can use for just about any purpose like: paying off other debt, renovating your home, or family needs like a wedding or adoption.
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Affirm vs. Klarna vs. Afterpay

Company	Amount	Fees	Soft credit check
Affirm	$50 to $17,500	None	Yes
Afterpay	$200 to $2,000	$8 late fee	Yes
Klarna	N/A	$7 late fee	Yes

Afterpay

Like Affirm, Afterpay may offer you a Pay in 4 interest-free option, and you must complete the payments within six weeks. The biggest difference between Afterpay and Affirm is that the former charges an $8 late fee if you miss a payment.

Read a full review on Afterpay.

Klarna

Klarna also offers several payment options, including paying in four installments or a lump sum within 30 days. You will get charged a $7 late fee if you miss a payment. However, it moved to a subscription service model, meaning you'll pay a $7.99 monthly fee to use its BNPL services.

Read a full review on Klarna.

FAQs

Will using Affirm hurt my credit score?

Affirm does use a soft credit check to determine the approval and interest rate of the buyer. However, soft credit inquiries do not impact your credit score and can only be seen by you when you’re checking your report.

Will using Affirm show up on my credit report?

Affirm reports some loans to Experian.

Should I use Affirm?

This really is a personal financial decision but you should understand the fine print before you sign up. You could be on the hook for high-interest rate payments and may be better off using a 0% introductory APR credit card if you qualify for one or consider a low-interest rate personal loan.

Get a Personal Loan with Quicken Loans

Use Quicken Loans to Get a Personal Loan

If you're tight on cash right now, you may want to consider getting a personal loan. A personal loan is a loan that you can use for just about any purpose like: paying off other debt, renovating your home, or family needs like a wedding or adoption.
TrustPilot Rating 4.6 out of 5
Connect with lenders for $0
100% online experience.

See How Much You Can Get Through Quicken Loans

The bottom line

Affirm is a tempting service, especially if approved for an interest-free option. However, some people should think twice before choosing a BNPL plan, like Affirm. If you struggle to keep up with monthly payments as is or are trying to build your credit history with smart credit choices, then Affirm may not be the right option. However, it could be an easy decision if you want to make a larger purchase and have a chance to do it with 0% interest.

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Sara Coleman is a former corporate gal turned creative entrepreneur. She began writing professionally several years ago and now contributes to multiple websites, blogs, and magazines. She’s also an avid reader and can’t resist a great historical fiction novel. Sara holds a BA in journalism from the University of Georgia and can be found supporting her Bulldogs every chance she has. She resides in Charlotte, North Carolina, with her wonderfully supportive husband and three children. When she’s not ushering her kids to sports and dance lessons, she can be found creating content for her own website, TheProperPen.com.

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