Affirm is a service that offers loans for online and in-store purchases. It provides short-term loan options at checkout with many retail partners.
This can make a larger purchase more affordable by spreading the cost.
Before you use Affirm, it’s worth reading some Affirm reviews to make sure you understand the interest rate and payment terms offered.
|🔍 What you’ll find in this article:|
|No upfront fees for loans||Interest rate offered can be high (up to 30%)|
|Easy to receive a quote and sign up||Taking a loan can affect your credit rating|
|Can make purchases with regular monthly payments rather than an initial lump sum||Affirm does not report on-time payments to credit bureaus|
|Some merchants offer zero-interest loans|
|No fee to pay back early|
A good way to see others’ opinions and experience of Affirm is to check reviews with sites like Trustpilot (an independent review site).
Affirm generally gets very positive reviews through Trustpilot. As of June 2021, 86% of Affirm reviews were in the top ‘excellent’ category, with only 9% rated ‘bad.’¹
Some positive references include the easy-to-use system and the ability to repay early. The impact on credit score for missed payment is a common frustration.
Affirm partners with both online and traditional stores. If an Affirm loan is available, this will be shown as a payment option at checkout. For merchants where it does not show at checkout, you may still be able to pay using a virtual card from Affirm.
After entering some personal details, you will be shown loan options - possibly with several choices of loan duration. To apply, you must be over 18, and provide a social security number.
Affirm will carry out a soft credit check to determine loan options. Some merchants offer 0% APR loans, others have APR ranging from 10% to 30%.²
After you have made the purchase, repayments are then due directly to Affirm each month. These can be managed on the Affirm app or through the website.
Yes. Affirm does not charge any additional fees for early payments, so this can be done at any time. You can also overpay in the same way, reducing the interest that adds on later.³
Like other loan providers, Affirm will report loan applications, credit amounts, and late payments to credit bureaus (Experian). This can affect your credit score.⁴
Whether this is bad for your score depends on your history with Affirm and any other credit providers. Missing payments is likely to have a negative effect.
Making an inquiry and seeing if you qualify will not affect your credit score.
Affirm does not charge any application or ongoing loan fees. It also does not charge fees to make overpayments or for missed payments (although this can affect your credit score).
The only additional payment is the interest payment, based on the payment plan chosen. For some merchants, you may be offered a 0% APR – so you only repay the total purchase price.
Other offers will have an APR between 10% and 30%. Terms offered can vary from 1 to 48 months – although most plans are 3, 6, or 12 months. Your offer will depend on the merchant, the purchase price, and your credit check results. Down payment may also be required for some purchases.
The following is an example of the repayments for a $500 purchase, with an APR of 15%⁵:
|Term length||Monthly repayment||Total end cost|
Affirm can be a good option for those who need to make a large purchase and have the finances in place to make monthly payments to cover this. It can allow purchase and receipt of the item sooner than if you save for it.
It is also a possible option for those who don’t have credit cards. Furthermore, it may be easier to obtain a purchase loan than a credit card, so is an option for those with worse credit history.
But you should consider your circumstances before taking out such a loan. If you already have significant debt, and do not have finances to cover payments, taking out another loan may not be a good idea.
An installment loan needs regular payments and if you are not good at managing this you can get into difficulty.
Afterpay offers a similar service to Affirm, providing point-of-sale loans with several merchants. It operates in a very different way, though. It only offers zero-interest loans, with four installments. The first is paid on purchase, and then the following payments every two weeks. It charges an $8 fee for each missed payment.⁶
This is a good option for those with poor credit scores, as Afterpay does not check this. If you want a straightforward way to defer payments, it works well.
But costs will mount if payments are missed (although they are capped at 25% of the purchase amount). So it may not be a good option for those with unsure finances or a habit of missing payments.
|🤓 For more details, see our review of Afterpay and its costs.|
Klarna is another point of sale loan provider. It offers a range of payment options. These include interest-based loans like Affirm offers, as well as zero-interest fixed installments. Loans are only available with some merchants, and APR rates are up to 29.99%.
It has two main fixed payment options. Pay in 4 requires four payments made in two-weekly installments - very similar to Afterpay. And Pay in 30 requires the full balance to be paid after 30 days.
Klarna charges late fees. These are $7 for each missed payment under ‘Pay in 4’ (so lower than Afterpay). And for loan options, late fees can be up to $35.⁷
With all loan services, the choice may come down to which are offered by the merchant you are using. They all have different, changing, merchants that they work with.
Affirm can only be used for purchases within the US. While you may not be able to spread costs, there are ways you can save money when transferring or spending money overseas.
For example, you can pay using Wise - an online solution for overseas payment with low, fully transparent costs.
If you pay for an international purchase through your bank, you’ll often be charged currency conversion rates, and may not receive the best exchange rate - meaning your purchase will cost you more than it should.
When you pay with Wise, you get the real mid-market exchange rate (the one seen on Google).
You can also use the Wise card to spend money when you travel abroad. So you never have to worry about getting a bad currency exchange rate again!
- Affirm Reviews | Read Customer Service Reviews
- How it works | Learn how to pay over time with Affirm
- Payments overview
- Reporting to credit bureaus
- How it works - Repayment
- How it Works - Afterpay
- Buy now pay later – How it works | Klarna US
All sources checked 18 June 2021.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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