Buy Now Pay Later loans are an excellent way to make pricey purchases that you would otherwise have no means of making, and if you are looking for a BNPL loan with zero interest and no fees, Affirm BNPL is an excellent place to start.
In this article, we’ll go over Affirm BNPL’s (Buy Now, Pay Later) offering, including its advantages and disadvantages, how it works, and how to determine whether it’s the right choice for you.
Overview of Affirm BNPL
With Affirm BNPL, you can make online and in-store payments when you shop at select online and in-store partners, including Amazon, Best Buy, Walmart, and Nordstrom.
Pay-in-four loans offered by this provider are similar to those offered by Afterpay, Klarna, and PayPal. They also have longer monthly payment plans that may charge interest.
While it’s generally better to pay cash for anything you don’t need when you’re shopping, Affirm BNPL is a great option if you need to finance an essential purchase. A BNPL plan can help you break it up into manageable payments. As long as the loan is interest-free or the interest rate is low enough that you can afford the monthly payments, you should be fine.
Additional Affirm Services
Affirm’s primary service is buy-now, pay-later financing, but the company is also expanding into other financial services. Customers of Affirm BNPL can open a Savings Account and will soon be able to apply for a debit card.
Affirm Savings Account provides high-interest rates without requiring a minimum balance, and there are no monthly fees. You will earn a high rate of return on every dollar you deposit, and it is completely free. At the time of writing, the account offers an APY of 1.25%.
As part of the upcoming Affirm Debit+ debit card, you will be able to pay for eligible purchases over time without incurring any interest charges. You will be able to split purchases over $100 into four easy payments based on your budget. The card won’t charge late fees, prepayments, annual fees, or open or close the account. While Affirm Debit+ is not yet available, you can add your name to the waitlist to be notified when it becomes available.
How Does Affirm BNPL Work?
Affirm BNPL loan terms vary by merchant, which means your repayment options and APR will also vary. There are no fees at Affirm, which is a plus among BNPL lenders.
Split is Affirm’s most straightforward plan, which mirrors the classic structure of BNPL loans. Affirm splits your total purchase into four equal installments for zero interest with Split Pay. Your first payment is due at checkout, and the three remaining installments are due biweekly over a period of 2 weeks until the loan is paid. These installments are automatically taken from your debit card, credit card, or checking account, whichever was used to make the purchase.
For example, if your cart totals $200, you would pay $50 at checkout with Split Pay, and then the remaining payments would be split into three installments of $50 due every two weeks over the next six weeks.
As well as short-term payment plans, Affirm Affirm BNPL offers long-term payment plans ranging from three to 60 months. These plans can have 0% to 30% APRs, and payments are due monthly, with the first one due one month after your purchase. If you don’t qualify for the full loan amount, you may have to pay an initial fee at checkout.
During checkout, Affirm will show you all repayment terms available to you. A longer term may mean lower monthly payments, but you’ll pay more interest.
Approval Process
You must open an account with Affirm before you can use them to finance your purchases. To verify your identity and review your credit, Affirm BNPL will run a soft inquiry into your credit report. The soft inquiry will not affect your credit score, nor will it appear on your credit report.
You will be prequalified for purchases up to your spending limit based on your credit report and personal information. Affirm will approve each transaction separately each time you make a purchase. Even if you have available credit under your spending limit, this does not guarantee that your transaction will be approved.
You will need to link your bank account or debit card number in order to make purchases. This is where your payments will be taken from each billing cycle.
Interest Rates and Fees
Shoppers’ interest rates vary based on which retailer they shop at and, in some cases, their credit history. Affirm’s website and app list many retailers that offer to finance as low as 0%. Among them are popular brands like Casper, Figs, Ring, and Room & Board.
Other purchases that charge interest range from 10% to 30%, depending on the retailer and your credit history. The interest rate at Affirm is simple rather than compound, which means your payment schedule is the same throughout the repayment period.
There are no fees associated with Affirm’s loans or the opening of an account. Furthermore, there are no hidden fees, and you will not be charged if your payment is late; however, your late payment may affect your credit history and credit score.
Affirm offers the same no-interest financing as another buy now, pay later services. You will usually have to pay 25% upfront and 25% every two weeks until your transaction is complete. The interest rate for Affirm’s loans may be higher, but they offer longer repaying terms that last three, six, or 12 months. Some last up to 48 months.
Credit Checks
Although there is no minimum credit score requirement, Affirm considers a soft credit check as part of your application. However, the soft check from Affirm does not harm your credit score.
Customer Service
The downside of choosing Affirm is that you might have a difficult time contacting them about your account. There is no contact information for customer service on the website. In order to find solutions to your questions and problems, you must go through the Help Center menus. In certain Help Center articles, webforms are provided to request information, such as confirmation that a loan has been repaid.
Affirm requests that you write to the Customer Care team at Affirm, Inc., 30 Isabella Street, Floor 4, Pittsburgh, PA 15212 if you have additional questions that can’t be answered through the Help Center.
App Functionality
Both Apple and Android devices are supported by Affirm’s mobile apps. With the app, you can browse and make purchases, view your transaction history, and pay your bills. You can customize your app based on your favorite merchants, shopping history, and spending limit.
Through the app, you can shop at participating merchants or create a virtual card that can be used anywhere Visa is accepted. Exclusive offers and special financing rates as low as 0% are also available through the app. You can also request a refund or return an item through it.
Additionally, the app also allows customers to open a high-yield Savings Account directly through it. Since these accounts have no balance requirements or monthly fees, you can open one with just a few dollars.
Pros and Cons of Affirm BNPL
Like any other BNPL service, there are benefits and downsides to choosing Affirm. The following are the most important pros and cons of their BNPL offering:
Pros
- There is a purchase limit of $17,500: You can finance large purchases with Affirm, up to $17,500, which so far is the largest limit offered by a BNPL provider. However, the ability to make such a large purchase depends on your credit, and you may be required to put down a down payment.
- No late fees are charged: There are no hidden fees at Affirm, including late fees. In the event of a late payment, you will not be charged. However, late and partial payments can affect your credit score and lower your chances of getting another loan with Affirm. Customers who have trouble making timely payments will find that Affirm is one of the best options since it does not charge any fees.
- 0% interest rates are available: Some retailers offer Affirm customers rates as low as 0%. You won’t have to pay anything extra over and above the purchase price of the items with no-interest financing.
Cons
- A credit check may be required: To ensure that a customer’s identity is verified and they are qualified for their spending limit, Affirm may make a soft credit inquiry. The credit score is not affected by this, but some competing BNPL lenders don’t even check credit at all. A bad credit score or limited credit experience may affect a customer’s ability to get approved for a purchase or their interest rate.
- High interest rates of up to 30%: The purpose of using BNPL services is often to avoid high interest rates that are comparable to credit cards. The standard interest rates for retailers that do not offer 0% financing range from 10% to 30%. Customers may want to consider other payment options first.
- Transaction approval is not guaranteed by prequalification: Affirm uses the prequalification process to determine your spending limits. However, you must be approved for each potential purchase before the purchase can be completed. You may still be declined, even if you are prequalified.
Affirm Compared to Other BNPL Options
Below is a table comparing the terms and fees of Affirm and two other of the most popular BNPL options available:
| Affirm | Afterpay | Klarna | |
| Amount Due at Purchase | As low as $0 | 25% | Depends on loan type |
| Credit Limit | Varies | Starts at $500 | Varies |
| Credit Check Required | Depends on loan type | No | Soft checks for Pay in 4 and Pay in 30 Hard inquiries for Six to 36 months loans |
| Interest | 0% or 10-30% | None | None |
| Late Fees | None | $10 + $7 if payment is still not done seven days after the due date | $7 for Pay in 4 and Pay in 30 $35 for Six to 36 months |
| Minimum Credit Score | Not available | N/A | Not available |
| Repayment Terms | Depends on loan type | 25% every two weeks | 25% every two weeks for Pay in 4 Due in full within 30 days for Pay in 30 Equal monthly payments for Six-to-36-month loans |
| Other Products | Virtual cards Affirm Savings Account Affirm Card | None | Pay in 30 days with no interest Six-to-36-month loans Virtual cards |
Should You Use Affirm BNPL?
Affirm offers more repayment options than other lenders for BNPL loans and is a reputable provider. However, the problem with spreading out a purchase over a long period of time is that you won’t always save money, especially if you don’t need the item in the first place. You should think about the length of time you’ll be in debt and what interest you’ll pay, if any, before agreeing to the loan’s terms.
Choose Affirm if…
- Your credit score doesn’t qualify you for a credit card: A BNPL plan may be easier to qualify for than a credit card, especially for borrowers without an established credit history. According to Affirm, the company never runs a hard credit check and considers other factors besides your credit score when deciding whether to approve or deny you for a loan.
- The loan is interest-free: Affirm merchants like Amazon, Neiman Marcus, and Peloton offer zero-interest loans. As long as you pay on time, you can get your product without paying anything extra.
- Funding a large expense is necessary: Affirm lets you buy a big-ticket item (like a mattress or a computer), and then pay for it later. Your monthly payments might be very affordable since it offers longer terms than other BNPL providers.
Avoid Affirm if…
- Keeping track of expenses is difficult for you: The best payment plans are for borrowers who are sure they can pay their installments on time. You may want to avoid taking on this type of debt if you have trouble tracking your money. Furthermore, Affirm also sends borrowers to collections if they are more than delinquent on payment for more than 120 days, so you might experience consequences if you fall behind.
- You need to contact customer service by phone: If you run into problems with your BNPL plan and need to contact Affirm, you will have to do so by chat, email, or social media. You may want to consider choosing another provider if you need to reach a customer service agent by phone.
- Your goal is to build credit using BNPL plans: Some of Affirm’s loans are reported to Experian, but it’s not guaranteed. Building credit is best done with a financing option where payments are always reported, such as a personal loan or credit card.
Final Thoughts
Affirm is an excellent choice for a BNPL loan, provided that you can make your payments on time. They don’t have any hidden fees or late payment fees, have large purchase limits, and offer additional services such as a high-yield savings account that make them very appealing for people looking for a BNPL provider with multiple financial products. However, you should be aware that their financing options that aren’t 0% interest can go as high as 30% in terms of interest and that there’s a chance a transaction might be rejected even if you have the necessary spending limit.
As far as BNPL providers go, Affirm works best for people with good credit scores and those who always pay on time. Although, you can still take advantage of their services if you can’t qualify for other products.
