Affirm is a buy now, pay later lender, whether you’re shopping in-store or online. If you qualify for one of these short-term loans, you’ll choose a payment schedule and then pay on affirm.com or the Affirm app.
The company promises that borrowers will know in advance how much they will pay and that this amount will never increase. “Consumers who choose Affirm will never pay a penny more than they accept at checkout, even if they are late on a payment,” says Silvija Martincevic, Chief Commercial Officer of Affirm.
Learn more about how Affirm works and if this credit card alternative might be right for you.
How does Affirm work?
You can either select Affirm at online checkout or use an Affirm Visa virtual card for an in-store purchase. Affirm has partnered with over 6,500 merchants, from Walmart to Peloton, and the virtual card is accepted at most Visa-accepting locations.
First, you will provide information such as your name, mobile number, and date of birth to prequalify for a loan without hurting your credit score. You will then receive a real-time decision on whether your loan has been approved and how much you can spend.
If you are approved, you can then choose to pay off your loan in three, six or 12 months. However, your terms may be shorter or longer depending on the store, the purchase and your credit.
At checkout you will see the total interest you will pay and Affirm promises never to charge you more than that. If you pay faster than the agreed terms, you could save money.
Your first payment is usually due one month after the merchant has processed your purchase, and subsequent payments are due every 30 days on the same date.
The Affirm virtual card is an option when a merchant does not offer Affirm online or when you want to use Affirm in a store. You can apply for a virtual card on the Affirm website or app and have the loan amount loaded onto the card for one-time use. You’ll enter the card number if you’re paying online, or load the card on Apple Pay or Google Pay and use it in most places where Visa is accepted.
You may be able to have more than one Affirm Loan at the same time. If you have an Affirm loan, you may have to wait to take another one if you’ve missed a payment, or you may be approved for one loan but not another. If Affirm cannot approve your loan, you will receive an email based on the decision.
Does Affirm have a credit limit?
Affirm approves lines of credit from $50 to $17,500, but larger amounts may require a down payment. Credit limits vary by merchant and depend on your credit report and payment history with Affirm.
The lender doesn’t have a minimum credit score to qualify for a loan, and checking to see if you’re prequalified won’t hurt your credit score. What will hurt your score is not paying the bill on time if you are approved for a loan.
Does Affirm affect your credit score?
Some loans will not be reported to the credit bureaus. Affirm says it won’t report your loan to Experian if the annual percentage rate is 0% and you have four payments every two weeks, or you were offered only one option: a term of three months to 0%.
The lender may report your payment history for other loans to Experian. Affirm may flag any loan with overdue payments, which can hurt your credit score.
If you use Affirm, these factors can affect your credit score:
- Payment history with Affirm
- Amount of credit used
- How long have you had credit
Partial or late payments can hurt your credit score and your ability to get another Affirm loan.
Does Affirm charge interest and fees?
Unlike credit cards, you don’t pay compound interest or interest on interest, and Affirm doesn’t charge late fees or penalties. You will not owe any prepayment, annual fee or account maintenance fee.
Interest on loans through Affirm is only charged on the purchase amount, or principal balance, saving you money. The merchant and purchase amount of each loan will determine whether you pay interest. Many Affirm partners offer 0% financing, but annual interest rates for other loans range from 10% to 30%.
The Affirm website has some examples of what you might pay. For a loan of $500 at an APR of 15%, you might be able to choose from three monthly payment plans: three payments of $170.94 and $12.82 in total interest, six payments of $87.04 and $22.24 in total interest, or 12 payments of $45.15 and $41.80. in the overall interest.
How do you pay your confirmed balance?
You can make or schedule payments on affirm.com or the Affirm app using your debit card or checking account, or you can mail a check.
Affirm sends email and SMS reminders for payments and offers automatic payments, but you must enable this option by logging into your account. This will automatically deduct your monthly payment each time a debit card or bank account is due.
If you want to stop using autopay, you’ll need to turn it off at least 24 hours before your next payment is due. For an overdue amount, you will need to schedule a one-time payment and will not be able to debit it automatically.
Is Affirm safe?
Affirm claims to follow all industry standards when it comes to protecting customers’ personal information. You will need a mobile number to create an account and log in, as well as two-factor authentication to verify your identity.
Users are not responsible for unauthorized purchases, and Affirm has dedicated teams to investigate such incidents.
If you have a problem with a purchase that you can’t resolve with the merchant, Affirm can open a dispute on your behalf as long as the transaction occurred within the last 60 days.
Both parties have 15 days to present their arguments and Affirm will make a decision within 15 days. If the dispute is resolved in your favor, you will receive a full refund of the purchase price.
How do returns work with Affirm?
You will need to contact the merchant to request a refund. While you wait for a refund, you must continue to make loan payments that are due.
Affirm issues refunds to your original payment method, but you may receive a check when you used a debit card or ACH payment. A refund can take longer than 30 days to arrive in your account.
Should you use Affirm?
Buy now, pay later, services like Affirm can help the right person, says Linda Jacob, Certified Financial Planner, Certified Financial Counselor and Director of Education at Consumer Credit of Des Moines.
“If used responsibly, especially at 0%, it can be a great tool,” says Jacob.
She warns customers to always read the fine print and be aware of the interest rate and term. At higher interest rates, such as 30%, these loans can “spin out of control,” says Jacob.
“Anyone who already has an exorbitant amount of debt should avoid taking out further loans,” she says.
At the same time, Affirm could help someone who is “committed to buying,” says Charles H. Thomas III, certified financial planner and founder of Intrepid Eagle Finance in Clover, South Carolina. “They could pay less interest and fees with a model like Affirm than on a credit card balance.”
But like credit cards, these loans could easily lead you to overspending, Thomas says.
“Our desire for instant gratification is strong and sometimes difficult to overcome,” he says. “Most people are better off waiting to make a purchase when they have the money available.”