Affirm is a buy now, pay later service that allows you to make in-store and online purchases without paying the total bill upfront. It’s a good choice for any consumer who needs to break down large payments into more manageable installments.
So, how does Affirm work? We’ll walk you through everything you need to know in this article.
Affirm is a financing company that provides point-of-sale loans through over 6,500 partner merchants. The company offers easy, no-hassle financing on purchases over $100 and fixed-rate loans with a simple monthly payment plan. This is perfect for large purchases such as mattresses, electronics and home furniture.
How Does Affirm Work?
Affirm is an alternative to credit cards and traditional financing, and it’s a very easy and simple way to purchase items online. Here’s how their system works:
- Affirm works with many partner merchants to give you exactly what you want when you need it.
- You can shop through the app or any of their partner stores.
- You can select the Affirm payment plan that’s best for you on the Affirm portal— 3, 6, or 12-month installments with as little as no APR or interest. You can use this calculator to get a rough idea of what to expect.
- Affirm pays the merchant upfront after your purchase is approved—the entire process ends just like your usual shopping experience.
If you’re just testing the waters, we suggest looking for the Affirm prequalify option so you get a rough estimate of how much you can borrow. Don’t worry. It doesn’t take long.
Need to see the step-by-step process of how Affirm works? We’ve covered that too!
Here’s how to use Affirm to purchase your favorite items online:
Step 1: Signup for Affirm
Signing up for Affirm is as easy as downloading the app on your phone and filling in all the registration details. Alternatively, you can sign up for Affirm through one of their partner stores or simply opt to checkout with Affirm and register before billing.
Shopping with Affirm is incredibly easy. Once you’ve completed the Affirm login process, you can buy directly from partner merchant stores or the Affirm app.
Once your cart is full, and you’re ready to go, head to the checkout and select Affirm as a payment option. The portal will show your loan amount and walk you through the entire process of getting your purchase approved.
Affirm will send you a monthly bill, and you can make your payments through your bank account or on the Affirm website. The site will show you how far along you are in the payment plan, so you’ll always know where you stand.
The great thing about Affirm is that you don’t have to pay late fees if you’re running a bit behind on your payments. This is a huge drawback of partnering with other financing companies.
However, it’s important to keep in mind that late payments may affect your credit score. Plus, you’ll have a harder time trying to apply for a loan with the company again.
If you have find that Affirm doesn’t work for you or your payment gets denied we recommend reading our “top 5 reasons why Affirm denies you” post
As with any product, there are pros and cons to purchasing products with Affirm. Here’s a look at both:
- You can shop from dozens of retailers when you use Affirm. These include Adidas, Nike, Delta Vacations, and more.
- Affirm doesn’t report to Experian for loans with a three-month payment and no APR.
- If you make your payments on time each month, you can boost your credit scores.
- There are no pre-set monthly payments.
- If you have bad credit, you may not be approved for a purchase with Affirm
- Some merchants charge up to 30% APR
- If you have bad credit, the length of the repayment period might not work for you—you’ll end up paying a lot more in interest with Affirm.
I think today was a great start on learning exactly how Affirm works. Now, let’s go over some of the most frequently asked questions. I’m sure this will clear up any doubts you may have.
Affirm does a “soft credit” check, which doesn’t affect your credit score. And if you’re one of the lucky few to get a 0% interest loan payable over four weeks, Affirm will not report your loan to Experian.
Expect all other loans to be reported to Experian, though. And if you’ve missed a payment, you’ll notice a negative impact on your FICO score.
Affirm does have an upper limit of $17,500, but that isn’t a standard loan amount that they offer to everyone.
Affirm sets a firm credit limit based on qualifying factors such as your credit history, household income, etc. Disappointed? Don’t be. You can take as many concurrent loans as you want as long as you’re still within your credit range.
Once a return is verified, Affirm refunds your money into your original payment method.
Affirm charges anywhere from 0 to 30% APR or interest depending on where you shop. The rates vary from merchant to merchant and will also depend on your prequalification and payment term.
With no hidden fees, easy approval and installments, soft credit checks, Affirm seems to be a great choice for those who need an essential purchase when between paychecks. Plus, their customer service is excellent, and they’re always available for questions or concerns that you may have about purchasing with them.
No matter how great the company or its terms, when it comes to credit purchases, be judicious as you will eventually have to pay back what you’ve borrowed.
I hope that this post helped you learn more about Affirm and how you can use it to your advantage.