Buy now, pay later, services have replaced layaway: you can take your purchase home now and pay for it over time.

Affirm is one of the most common buy now, pay later services. But how does Affirm compare to similar services, and should you consider using it for your next big purchase?

This review will look at the financial services Affirm provides to its borrowers and how you can get started. We’ll also answer common questions about Affirm and explain how it can affect your credit report.

What is Affirm?

Affirm is a buy-it-now, pay-later service that allows consumers to split large purchases into multiple payments. Whether you want to shop online or in-store, Affirm can generate a virtual credit card for you to use at checkout.

When selecting a repayment method, buyers can choose between short-term interest-free payments or more dispersed monthly payments. Choosing interest-free payments will spread your purchase over four payments every two weeks.

Founded in 2012, To affirm is a fintech company headquartered in San Francisco. Over the past decade, Affirm has built trust within the industry, and we have no trouble recommending it based on its reputation alone.

Looking for another buy now, pay later? Read our reviews on Klarna and After-payment.

How does Affirm work?

Shopping with Affirm is relatively simple and you can get started in two ways. The first method is to visit a store that offers Affirm payments and select the option during checkout. Our preferred method is download the Affirm app for Apple iOS or Android devices.

Affirm app download

You can view your pre-approval amount by downloading the free Affirm app. The app also allows buyers to view limited time offers that you can combine with Affirm financing.

Once you’ve created an account and are set up with the Affirm app, you can view your approved spend amount and start shopping. At the top of the app’s home screen, you’ll see the options Buy in app or Get virtual card.

You can also tap the Shop button in the menu bar at the bottom of the screen to see all the promotional offers available with Affirm financing.

Shopping with Affirm

Our preferred method of purchasing with Affirm is through the Get a Virtual Card option. Affirm will provide you with a one-time use virtual credit card for your purchase using this selection. You can redeem the card online or in-store using Pay Apple Where Google Pay.

You’ll start by entering the total amount of the order, making sure to include taxes and shipping. If necessary, you can round to the nearest dollar. Any unused funds are returned to your account, so you won’t lose those pennies.

Once you have entered an amount, Affirm will ask you to select a payment plan. During our tests, we chose to finance $500 and received several repayment options. We could repay over six weeks with 0% APR or over six or 12 months (monthly payments) with 15.99% APR. No deposit is required.

It is important to note that your offers may not be the same as ours. While six-week repayment plans are always offered with zero interest rates, monthly plans will include a percentage interest. Your offered interest rates (APR) will vary based on personal financial factors.

Once you have selected a repayment plan and payment dates, you must agree to the terms and conditions before receiving your virtual card. If you plan to shop online, use the virtual numbers and enter them at checkout.

Alternatively, you can select the option to add your virtual credit card to your mobile device’s virtual wallet. This will allow you to pay with Apple Pay or Google Pay at any retailer that has a supported wireless payment terminal.

Manage your confirmed purchases

Once you’ve paid for your purchase, your Affirm Loan will appear under the Manage tab of the app. Here you can see the total loan amount and the amount paid to date. You can also make additional payments to pay off the loan faster.

By default, Affirm will automatically pay your loans with a provided credit or debit card. If you want to disable the autopay option, you can do so in your loan options. Additional details provided here also include your interest rate, virtual card number, and loan terms.

Alternatives to Affirm

If an Affirm loan doesn’t seem like the right option for your purchases, or if you’ve already checked it out and don’t like what’s on offer, other options are available. From other buy it now and pay later services to traditional personal loans, there are several alternatives.

Other services Buy now, pay later

Affirm is a popular option for splitting purchases into multiple payments, but it’s not the only buy now, pay later service. Others are Afterpay, Zip (formerly Quadpay), KlarnaPayPal and Sezzle.

Here’s a comparison of three popular buy now, pay later services, showing interest rates, late fees and payment schedules.

Buy Now, Pay Later Service Comparison

Features

To affirm

Klarna

After-payment

Payment schedule

Affirm Pay in 4 (every 2 weeks) or Monthly Funding

Pay in 4, Pay in 30 days & Monthly financing

First of 4 payments immediately, then every 2 weeks

Interest rate

0% on Affirm Pay in 4; 0% to 30% per month

0% for Pay in 4 and Pay in 30 Days; 0% to 25% per month

0% interest

Late fee

No late fees

Up to $7 on Pay in 4; up to $35 per month

$10, followed by $7 if payment is not made

Effect of credit score

Flexible credit check; can report history to Experian

Flexible credit check for Pay in 4 and Pay in 30

No credit check

where it is accepted

Anywhere online and in-store with wireless payment

Everywhere online and select in-store retailers

Select online and in-store retailers

Other affirmation alternatives

If a “buy now, pay later” service isn’t the right choice, you may want to consider more traditional personal loans. The selection of personal loans will allow you to borrow money and pay it back while increasing your credit with all three credit bureaus.

If you are looking for personal loans, we recommend that you consult our best personal loan guide help. If you are new to loans, we also recommend that you read our step by step guide.

Selecting a zero rate credit card is another option when making a large purchase. Check The Penny Hoarder Academy: Credit Cards 101 to learn more about the basics. Credit cards can be helpful or devastating, depending on how you use them.

The pros and cons of asserting

Advantages

  • Interest-free loans are available for shoppers who want to pay off their purchases with bi-weekly payments.

  • Affirm has no hidden fees and no late fees are imposed if you are late on your payments.

  • You can shop almost anywhere with Affirm through its virtual credit card, which can be added to your mobile wallet.

  • No down payment is required for your Affirm loan.

The inconvenients

  • Only specific Affirm loans are reported to Experian, and none are reported to TransUnion or Equifax.

  • There is no option at this time to defer your payments if necessary.

  • Interest rates are subject to change depending on the creditworthiness of the individual borrower, with APRs of up to 30%.

Frequently Asked Questions (FAQ)

Is Affirming Hurting Your Credit Score?

Research for our Affirm review revealed that the service can affect your credit score. Affirm does not report to the credit bureaus if your loan is 0% and four payments every two weeks or if you were offered only one option of a three month payment term with 0%.

Affirm may report loan payment history to Experian. Additional details Affirm may report to Experian include the amount of credit you have used, the length of your credit, and any late payments. Creating an Affirm account or seeing if you are prequalified will not affect your credit history or credit score.

Is using Affirm a good idea?

As in any system in which you borrow money, Affirm is only a good idea if you are financially stable enough to pay all due payments on time. No-APR loans are the best choice when selecting an Affirm repayment plan because you won’t owe any additional interest.

Affirm may not be the best option for those looking to boost their credit, as it is inconsistent in reporting to credit bureaus. When Affirm reports, it only reports to Experian.

What credit score do you need to use Affirm?

Affirm does not specify a minimum credit score for its candidates. But Affirm will consider your credit score as part of your overall application. Your creditworthiness may be based on additional factors such as income and credit report. No deposit is required to use Affirm’s services.

Is Klarna the same as Affirm?

Affirm and Klarna are two separate buy now, pay later services. Both options allow consumers to make purchases that can be split into multiple payments. Investigate both options to see where you can get the lower APR for your loan.

Michael Archambault is a senior technology writer at The Penny Hoarder.

This was originally posted on The Penny Hoarder, which helps millions of readers around the world earn and save money by sharing unique job opportunities, personal stories, giveaways and more. The Inc. 5000 ranked The Penny Hoarder as the fastest growing private media company in the United States in 2017.

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