Affirm Personal Loans Review

An Affirm loan lets you finance online retail purchases, which you can then pay back in monthly payments within three to 12 months without fees or hidden charges. This new financing alternative to credit cards is perfect for customers who want to build credit, but before you sign up, it’s important to understand what you’re getting into.

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In this article

    Affirm retail financing at a glance

    LenderLoan AmountAPRTermsKey Benefit 
    AffirmUp to $17,5000%–30% 3–48 monthsNo fees or compounding interest

    What we like about Affirm retail financing

    An Affirm loan lets you pay for merchandise or services at thousands of online and in-store retailers. But unlike a credit card or personal loan, Affirm doesn’t charge late fees, service fees, prepayment fees or hidden fees. Affirm let’s you make monthly installment payments for everyday retail items. Its loans have fixed interest rates and set payoff dates, so you always know exactly how much you owe and when payments are due. Plus, repaying your Affirm loans on time improves your credit score; Affirm reports to Experian. We also like the fact that military members can apply for a 6% interest rate cap, and anyone can sign up for an Affirm savings account.

    Things to consider

    While pre-qualification at sign up is done with a soft credit check, in-app loan approvals work differently. Borrowing limits and interest rates are determined per purchase, and you may be qualified for some purchases but not others or may be asked to provide a down payment. Also, when it comes to repaying your loans, you can only make payments with a linked bank account.

    If you’re not pre-approved for an Affirm account because of your credit scores, you may want to consider personal loans for bad credit.

    Something else worth noting is that with a quick sign-up process and so many retailers accepting Affirm payments, it can be easy to overspend once you’re approved for an account. Affirm loans are also unsecured without fees, so you may face higher APRs, with some loans as high as 30%.

    What you need to know about Affirm retail financing

    Affirm is a point-of-sale lender offering alternative financing to credit cards and personal loans. Affirm loans are good for:

    • Consumers who are new to credit.
    • People trying to get away from credit cards.
    • People trying to rebuild credit.

    Affirm loans range from $1 to $17,500, with an average APR of 10% to 30%, however, some merchants may offer 0% APR specials. Depending on how much you borrow, terms can range from one to three months for small loans up to 48 months for large loans. Affirm prides itself on upfront pricing and zero-fee financing so you’ll get to see your APR, full terms and total payments before agreeing to the loan.

    Signing up and pre-qualifying for Affirm is quick and easy. You need to provide a mobile number, full legal name, date of birth and last four digits of your Social Security number. Affirm runs a soft credit check that doesn’t hurt your credit score.

    There are three ways to apply for a loan with Affirm:

    • Make a purchase at a partner store: Affirm is partnered with thousands of online merchants in apparel, electronics, luxury, travel and more. You can apply for an Affirm loan at checkout with one of its participating merchants.
    • Open an account: If you want to use Affirm for in-store purchases with a virtual card, create an account and apply online.
    • Use the mobile app: Download the free app and follow the prompts to create an account.

    Once you’re approved, Affirm will give you a one-time-use virtual card to pay for your items if it’s for a non-partnered or in-store merchant. If you’re making a purchase online with a partnered merchant, just choose Affirm at checkout.

    Collateral and criteria

    Affirm offers unsecured, closed-end installment loans, which makes payments and terms easier to understand. However, it does not offer secured loans, so users have no option to negotiate interest rates. Borrowing limits and interest rates are determined per purchase/per user account.

    Affirm has no established minimum credit score requirement posted to its website. However, for account opening and pre-qualification, a soft credit check is conducted. For ongoing loan approvals, your established credit score and the way you use your Affirm account (loan amounts, payment history) will be taken into consideration.

    Affirm retail financing vs. the competition

    Affirm vs. Klarna

    Klarna is also a point-of-sale lender that lets you pay for online and in-store purchases with a mobile app and a one-time-use virtual card. Klarna’s merchandise partners are much more internationally diverse than Affirm, as it is available in 17 countries.

    Klarna is different from Affirm in the way it offers two payment plan choices. You can split purchases into four payments or choose Pay Later in 30-Days. Unlike Affirm, you can make payments with a credit or debit card and can choose to pay after shipped items are received. The average APR is 19.99%, and the minimum spend amount is $35.

    Affirm vs. Bread

    Like Affirm, Bread is also partnered with Cross River Bank to offer point-of-sale lending in much the same way as explained in our Affirm loans review. Bread’s installment loan terms range from six, 12 and 24 months, with an APR range of 0% to 29.99%, based on creditworthiness.

    However, access to Bread is limited. The only way to apply for a loan is directly through a participating retailer’s website at checkout. Bread does not list merchant partners on its website or have a mobile app like Affirm and Klarna. This makes it harder to research purchases ahead of time.

    Methodology

    SimpleScore

    The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.

    For every review, our editorial team:

    • Identifies five measurable aspects to compare across each brand
    • Determines the rating criteria for each aspect score
    • Averages the five aspect scores to produce a single SimpleScore

    Here’s a breakdown of the five aspect scores and their rating criteria for our review of the best personal loans of 2020.

    Why do some brands have different SimpleScores on different pages?

    To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.

    However, it’s also possible for the same product from the same brand to have multiple SimpleScores. For instance, if we compare NetCredit’s personal loans according to our criteria for the best personal loans, it scores a 2.3 out of 5. But when we compare NetCredit according to the criteria for the best bad credit personal loans, it scores considerably higher, since the criteria for the latter review are more lenient (lenders who serve borrowers with bad credit will always offer higher rates, so we needed to adjust our category methodology to account for different industry standards).

    Questions about our methodology?

    Email Hayley Armstrong at hayley@thesimpledollar.com.

    Rates

    We looked at the maximum APR for each lender — the lower their maximum rate, the higher their score.

    Loan Size

    We awarded higher scores to lenders with more generous loan sizes.

    Customer Satisfaction

    We leveraged the J.D. Power 2019 Personal Loan Satisfaction Study℠ to see how customers rated their experience with each lender. (If a lender wasn’t included in J.D. Power’s study, we skipped this aspect and averaged the four remaining aspect scores.)

    Support

    We awarded higher scores to lenders with the most channels for customer support.

    Fees

    We looked at the three most common fees — origination, late payment, and pre-payment — and penalized lenders for each fee charged.

    Christine Renee

    Contributing Writer

    Christine C. Renee is a personal finance writer who enjoys delving into money topics like budgeting and fintech. She has been published in Careful Cents, Investor Junkie, and Money Mini Blog. When not writing, she uses her bachelor’s degree in business admin to help micro-businesses and solopreneurs manage time and money. On her days off, you may find her with a book on information technology and security.

    Reviewed by

    • Courtney Mihocik
      Courtney Mihocik
      Loans Editor

      Courtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to Interest.com, PersonalLoans.org, and elsewhere.