Affirm Personal Loan Review

Get access to purchase financing with a variety of Affirm personal loan rates

Businesswoman Online Shopping In Cafe
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Affirm offers personal loans on online purchases, through various retailers who are willing to offer payment plans. Payment plans, rates, and other terms vary according to the retailer. However, it’s easy to see what kind of plan you’re eligible for and get instant financing for purchases you make online.

Who Is an Affirm Personal Loan Best For?

Affirm is likely best for those who shop frequently online and want a way to pay off their purchases over time while potentially building their credit through Experian (Affirm only reports to that one credit bureau). Affirm may be a good fit if you:

  • Are trying to build or rebuild your credit
  • Can repay the loan over a short period of time (usually up to 12 months)
  • Are looking to finance small amounts
  • Want to focus on individual purchases

Pros

  • Instant financing

  • Upfront payment plan

  • No late fees

  • No minimum credit score

  • Might help improve your credit

Cons

  • Interest rates can be high

  • Not available with all retailers

  • No refund on interest paid

  • No rewards program

  • Not every loan will improve your credit

Pros Explained

  • Instant financing: Find out if you’re approved while in the online shopping cart and receive instant financing for your purchase.
  • Upfront payment plan: Payment plan options, including total cost, are given before you decide to accept. You can choose your desired plan and see all of the information, selecting what works for you.
  • No late fees: Affirm doesn’t charge any late fees.
  • No recommended minimum credit score: Affirm does not state a recommended minimum credit score, so those with fair or poor credit may still be able to qualify.
  • Might improve your credit: Some retailer plans report to the credit bureaus, so your payment history could show up on your report. If you make on-time payments, positive payment activity will be potentially reported and could help improve your credit score.

Cons Explained

  • Interest rates could be high: Interest rates vary by retailer and payment plan. As a result, interest rates could be high. These rates could potentially even be higher than credit card rates, too.
  • Not available with all retailers: Not all retailers accept Affirm for payments. Even though there are thousands of retailers, not every online shopping experience can be handled with Affirm.
  • No refund on interest paid: Even though you can get a refund for the purchase price, you won’t receive a refund on the interest you’ve already paid. So, if you’ve made some payments, or interest has accrued, you’re on the hook for that interest still.
  • No rewards program: Unlike when paying with some credit cards, you won’t be able to amass rewards points or cash back when paying with Affirm.
  • Not every loan will improve your credit: While some payments are reported to credit bureaus, not every plan is reported. As a result, you might not see an improvement in your credit, even if you pay on time.

Affirm Personal Loan Rates & Terms

Because different retailers offer different plan options, the rates and terms vary widely. However, in general, you can expect various interest rates, ranging from 0% APR financing with some retailers up to 30% APR financing at others.

Interest doesn’t compound, so you’ll only pay a flat interest rate on each purchase.

Most loans are available for three, six, or 12 months. However, there are circumstances where, for smaller purchases, you might be able to get a loan term for as little as one month. For larger purchases, a retailer might allow you to pay over the course of 48 months.

Before you choose a plan, though, you’ll be given available options, and you can decide which terms best fit your needs. 

How Much Can You Borrow With Affirm?

There is no loan limit with Affirm. In general, you simply look at the available payment plans, apply for the one you like, and then see if you’re approved for your purchase. It’s possible to have multiple Affirm payment plans at once for different purchases.

Realize, though, that Affirm can deny you financing based on the amount you’ve already borrowed and other factors. So, even though there is no formal limit to the number of loans you have and the amount you can borrow, you might be limited over time.

Avoid trying to juggle too many payment plans. After a while, you could lose track of where you are, and could also end up paying a lot more in interest than you think.

Affirm Personal Loan Fees

Affirm charges no additional fees. The total you pay for your loan is listed upfront, so you don’t have to worry about any hidden costs. There are no prepayment fees, so you can pay off your plan early and save on the interest. Additionally, there are no late fees or administrative fees.

How to Get a Personal Loan From Affirm

Affirm manages financing a little differently. You can apply for a loan plan through a merchant’s website or through the Affirm app. Once you pick the plan you like and are approved for financing, you can use the app to manage your payments. Your credit information will be used to determine the terms of possible payment plans before you can accept one.

Each time you get a payment plan, you’re getting a new approval, so you might be denied later on, based on factors like missed payments or how many other payment plans you already have.

While it may not feel as serious as applying for a lump sum personal loan elsewhere, Affirm does run a credit check to determine your eligibility for payment plans every time you select it before checking out with a partnered merchant. While the soft pull may not affect your credit score, your loan and payments may still have an impact. 

The Bottom Line

Benefits

Affirm personal loans offer a way to pay for online purchases with real-time financing. It’s possible to set up short-term payment plans with a variety of terms and interest rates with retailers that accept Affirm. Plus, there are no fees associated with Affirm, so if you pay late one month, it won’t cost you extra money. If you want a more manageable way to pay off purchases while potentially building your credit, Affirm could be a good choice.

Drawbacks

Using Affirm to pay for too many purchases could potentially get messy since you’d have to keep track of several different payment plans. Those could also add up every month to more than you originally wanted to spend in the first place. Plus, with rates as high as 30% APR, you could end up paying more in interest than you would charging a purchase to your credit card. If you have good credit and can pay off your purchases faster, a rewards credit card with a lower monthly APR may work better because it comes with the added advantage of allowing you to earn points or cash back that may offset some of the interest costs.

Article Sources

  1. Affirm. "Does Affirm Report to Any Credit Bureaus?" Accessed March 26, 2020.

  2. Affirm. "Where to Shop." Accessed March 26, 2020.

  3. Affirm. "APR Calculator." Accessed March 26, 2020.

  4. Affirm. "How Long Do I Get to Pay Off a Loan?" Accessed March 26, 2020.

  5. Affirm. "Does Affirm Charge Interest and Fees?" Accessed March 26, 2020.