Affirm vs Afterpay

Affirm vs Afterpay

Buy now, pay later (BNPL) apps are becoming increasingly popular financing options that allow users to buy products from a retailer right away and pay later. These point-of-sale loans are often repaid through regular installments.

Usually, BNPL apps split a user’s purchases into smaller payments that are due biweekly or monthly. They also do not charge any interest or fees, which is why they are considered lower-interest or no-interest alternatives to credit cards.

Afterpay and Affirm are two popular BNPL apps that many retailers and customers use for payments. These apps allow customers to set up direct debit arrangements with merchants. They also send notifications to customers when the payments are due to help them manage their finances better.

In this article, we’ll compare Affirm and Afterpay to help you decide which one is better for your shopping needs. Let’s dive in.

Affirm vs Afterpay – Credit Terms

Affirm and Afterpay offer buy now, pay later financing. The difference is that Afterpay offers only one lending option to consumers — pay-in-four. With this option, Afterpay breaks the purchase price into four equal payments.

In contrast, Affirm provides a wider range of repayment options. Affirm allows you to choose the payment amount, interest rate, and repayment term that suit your budget. Like other BNPL apps such as Afterpay, Affirm offers the pay-in-four option. But it also provides longer repayment terms of up to 48 months.

Moreover, Affirm decides credit limits depending on customer profiles. But it restricts the maximum loan amount to $17,500. You may also have to pay a downpayment depending on the merchant you’re buying from.

On the other hand, there is usually no minimum order value to use Afterpay. But some merchants may allow you to use this financing option only if you spend a certain amount on their online shopping platforms or at their stores.

With Afterpay, your personal profile determines your credit limit. However, the app does not guarantee that it will approve your purchase transaction at checkout. As is the case with other pay-in-four programs, Afterpay underwrites every transaction individually to make an instant credit decision.

Does Affirm or Afterpay affect credit score?

When you open an account with Affirm, it does a soft credit inquiry to consider you for future transactions. This simple inquiry does not have any impact on your credit score or credit report.

But when you use Affirm to buy something online or in-store, it may perform a hard credit inquiry which can affect your credit score. It may also report your credit usage and payment history to credit bureaus. This can improve your credit score as long as you make timely payments. It can also keep you from maxing out your credit limit.

Meanwhile, Afterpay does not perform any credit checks when you create an account or make a purchase with it. It will also not report missed or late payments to credit bureaus. So, it is a fantastic financing option for people who have poor credit scores or do not have a sufficient credit history to be approved by other lenders.

However, its downside is that you cannot improve your credit score with Afterpay.

Who has the lowest interest and fees?

Affirm’s interest rates vary depending on the retailer you’re shopping from. Certain retailers provide an interest-free purchase offer, while others may charge a high rate of interest.

When you shop from a merchant using Affirm, you can review all the financing information during your transaction. This allows you to decide whether you want to go ahead with your purchase or not. It also ensures that you do not have to pay more than what you agreed to.

If you think you might be late with a payment, Affirm allows you to reschedule payments. To do this, simply log into your Affirm account through its website or app. Although you don’t have to pay late fees with Affirm, making late or partial payments can affect your credit score.

Meanwhile, with Afterpay, there are no interest or fees to pay as long as you pay all your scheduled pay-in-four installments on time. If you make a late payment, Afterpay will charge you a fee of $10. If you fail to settle your account within seven days, the app will charge you another $7.

Comparing Affirm and Afterpay Mobile Apps

Both have mobile apps for Android and Apple users. These apps allow customers to log into their accounts, browse and shop from participating retailers, and pay their bills whenever and wherever they want.

The apps also offer a tailored experience depending on a customer’s preferred retailers, shopping history, and spending limit.

Affirm enables users to make purchases online or in-store with its mobile app from more than 100,000 participating retailers. It provides exclusive offers and special financing rates from partner retailers. It also allows users to create a high-yield savings account with no minimum balance requirements or monthly fees.

On the other hand, the Afterpay mobile app allows users to browse and shop from thousands of participating merchants online or in person. You can not only check your shopping history but also monitor the shipping status of your purchases and your payment schedule.

You can also change your payment method with the Afterpay app. What’s more, it allows you to prepay upcoming payments so you can stay ahead of your payment schedule.

Which Is Better? Afterpay or Affirm

If you have to choose between Affirm and Afterpay, we suggest that you go with Affirm. Its various repayment options, longer repayment terms on bigger purchases, absence of late fees, and the ability to improve your credit score make it a great choice.

On the other hand, Afterpay is a great option for customers who have poor credit or those who’ve yet to build their credit profile.

Whichever app you choose, make sure to read the fine print before finalizing any transactions.

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