With over 1,000 retail partners, Affirm has helped more than one million consumers pay off their large online purchases over time across easy, fixed monthly payments, with upfront pricing, no extra costs, and no hidden fees.
In other words, the website emphasizes that the total you see at checkout is always what you’ll actually pay. Just enter a few pieces of information—which always remain secure—and you’ll receive a real-time decision about whether or not you’re approved for a loan.
Then, complete the checkout process like normal. Alternately, customers can generate a single-use virtual card that can be accepted by any MasterCard retailer.
Afterward, you’ll pay for your Affirm loan on the same date each month, and once you’re finished paying, you’re free and clear—and perhaps even eligible to take out another loan.
The website certainly makes this whole process seem simple, straightforward, and crystal clear. But will you pay a lot for the convenience provided by Affirm? Here, we’ll provide the details that can help you make up your mind.
Affirm vs. Credit Cards: How Does It Work?
The website tells us that among Affirm’s 1,000+ merchants, popular examples include Wayfair, Expedia, Casper Mattress, Peloton, and Motorola (to name just a few). Whichever merchant you’re purchasing from, though, they explain the process works over a few simple steps:
- Select the Affirm payment option on the checkout page.
- Enter your information (we'll talk specifics in the Fees section below), and you'll be notified in real time if you're approved.
- Finalize your loan and make payments when they’re due.
Compared to a traditional credit card, Affirm emphasizes that their loans—which are provided by NJ-based Cross River Bank—are not revolving lines of credit. Their FAQ explains: “While customers can take out multiple Affirm loans at once, each Affirm loan application is evaluated separately as a closed-end transaction.”
Also, unlike a credit card, Affirm only performs a ‘soft’ credit check to verify your identity and determine your loan eligibility, which will not affect your credit score. However, for all loans requested on or after August 3, 2016, they do report “information about your loan and payment activity” to Experian, with “plans to report to other credit bureaus in the future.”
All sensitive information submitted to Affirm, including Social Security numbers, is encrypted for security, and is never sold or rented to anyone.
What’s the Difference With Affirm’s App?
Affirm’s iOS and Android apps also help consumers “split any big online purchase into smaller, fixed payments” in just a few steps, but they go about it differently.
Instead of applying for the loan directly through a participating merchant’s site, users simply open the app, enter how much they’re planning to spend, and choose their payment schedule (three, six, or 12 months).
If approved, the app will generate a pre-loaded, single-use virtual card that can be redeemed wherever they're shopping; just “show the card to the salesperson, tell them that you’re paying with MasterCard, and ask them to key in the number just like a credit card.”
Compared to merchant-direct purchases, Affirm’s iOS and Android app generates a single-use, pre-loaded credit card that can be redeemed anywhere that accepts MasterCard. Image credit: Google
Then, monthly payments are made as scheduled. You can even do this, as well as manage other aspects of your account, while on the go through the app.
Speaking of which, what can you expect to pay for an Affirm loan?
Affirm Fees, Eligibility Criteria, & Return Details
Affirm offers short-term loans (three, six, or 12 months) ranging between $100 and $10,000. All loans are issued through Cross River Bank, with available rates between 10 and 30 percent, based on your credit. Some merchants offer zero percent.
Pro tip: To get an idea of what this means from a real-world perspective, we found Affirm’s cost calculator to be a handy tool.
Outside of this finance charge, Affirm emphasizes that they don’t assess “late fees, service fees, prepayment fees, or any other hidden fees.” “What you see is what you'll pay—never a penny more,” their website reports.
In order to qualify, at minimum, you must be a United States resident 18 years or older (19 years old in Alabama or if you’re a ward of the state in Nebraska), and not a resident of IA or WV.
During the application process, you’ll need to provide your name, email address, mobile phone number (and also agree to receive SMS texts), date of birth, and the last four digits of your Social Security number to verify your identity. Sometimes, they might require borrowers to link their online checking account if more financial verification is required. If approved, it can be unlinked at any time.
Before accepting any Affirm offer, you’ll know exactly what your interest rate is (and how much you’ll pay above your original amount), as well as each of your monthly installment amounts. There are no hidden fees or compounding or deferred interest.
In some instances, Affirm may not be able to approve financing for the full purchase price. Here, they’ll require a fixed (i.e., it cannot be changed) down payment that can be processed via debit card. In other instances, they may not be able to approve any type of financing, at which point the applicant will be immediately notified.
Affirm will make your first payment due one calendar month from the date your loan is processed, at which point they’ll send you an email and SMS text message as reminders. All future payments will be due the same day each month, which can be made via the lender’s website, debit card or ACH transfer, or autopayment.
The Affirm FAQ emphasizes that, “returns are subject to the merchant's return policy. Please contact the merchant if you would like to return your item(s).” If processed by the retailer within 120 days of purchase, Affirm will credit any payments you’ve made on the loan. But if the merchant issues you store credit, you’ll still be responsible for repaying your loan.
Have additional questions? Support can be reached at email@example.com.
What Are Affirm’s Customers Saying In Their Reviews?
Although the company has been in business for five-plus years, we didn’t encounter a whole lot of direct online customer feedback for Affirm during our research.
Even recent professional feedback was limited, albeit mostly positive. MoneyUnder30’s Lauren Barrett wrote that Affirm’s ease of use, lack of fees, and transparent business practices make it a solid option if “you’ve got pretty good credit, (because no one should ever sign up for a 30 percent interest rate), and want an alternative to credit cards or bank loans for financing big (but not huge) purchases.”
NerdWallet’s Amrita Jayakumar also liked the fact that an Affirm loan won’t impact your credit score (unless you make late payments or default, of course).
Affirm’s iOS and Android app seemed to have a mostly positive online customer reputation as well, with 3,500+ reviews across iTunes and Google Play, with an average combined rating of about five stars.
Most compliments appeared to reference its simplicity and ease of use, clean interface, and helpful support, while common complaints (what relatively few there were) frequently related to bugginess.
From a company perspective, Affirm was founded in 2012 by serial entrepreneur Max Levchin (previously of PayPal, Slide, Yelp, and Evernote). They held an A+ Better Business Bureau rating, based on 19 customer reviews and 40 closed complaints, as of 10/26/17.
Most of these appeared related to problems resolving difficulties through customer support. A company representative responded with a resolution in each instance.
Are There Other Point-of-Sale Financing Companies Like Affirm?
There are many other point-of-sale financing companies competing for the same customers as Affirm, including popular options like Klarna, PayPal, Vyze, Bread, and Blisplay, to name just a few. With so many options, how does Affirm compare?
The reality is that most of these options share more in common than they do differences. For example, nearly all provide quick application processes, the ability to split purchases into equal installments ranging from months to years, and APRs under 35 percent.
However, perhaps the biggest distinguishing factors regarding Affirm are their immediate decisions, as well as the fact they only perform ‘soft’ inquiries that won’t impact your credit score. From a convenience standpoint, they’re also the only major player that offers single-use virtual cards that can be obtained in advance and then used anywhere MasterCard is accepted.
Our Final Thoughts About Affirm
Based on their overwhelmingly positive online reputation among consumers, it seems the vast majority of their customers have been pleased with Affirm’s services, whether at the point of sale, or through the iOS and Android app.
And based on the fact that they provide real-time decisions that won’t impact your credit score, it seems you might not have much more to lose than a few minutes of your time by applying.
Just keep in mind that—like any form of credit—you’ll want to make sure you can make any scheduled payments on time, so that you’re not financially overextending yourself.