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Affirm Personal Loans: 2018 Review

Nov. 8, 2018
Loans, Personal Loans, Personal Loans Reviews
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We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

Affirm gives people small, instant loans for big purchases. You may come across Affirm as a payment option at a retailer’s checkout, or apply for a loan through its mobile app.

Affirm rates and terms

affirm-logo
Loan amounts$100 - $15,000
Typical APR10% - 30% (0% available at some retailers)
Origination feeNone
Time to fundingImmediate
Repayments3, 6, 12, 24, or 36 months
Soft credit check?Yes
How to qualify
  • No minimum credit score.
  • No minimum credit history.
Best forBorrowers new to credit who want to pay for a big purchase over time
Clicking “Visit Affirm” will take you to Affirm's website for an application.

» MORE: Get a personalized plan to build your credit

Is Affirm right for you?

Loans from Affirm are convenient when you need to make a big purchase, as long as you have room in your budget to pay it off. It’s not a good idea for an impulse buy or something you know you can save up for.

AFFIRM MAY BE A GOOD OPTION IF YOU:

Must make an immediate purchase but don’t have money saved or a credit card. Affirm gives borrowers short-term personal loans for one-time purchases such as a mattress, furniture or plane tickets.

Have a credit card but your credit limit is lower than the cost of the purchase. Taking an Affirm loan is better than maxing out your credit card, which could lower your credit score.

Are new to credit and cannot qualify for a credit card. Affirm says it uses only soft credit checks and runs its own algorithm to measure a borrower’s creditworthiness. In some cases, the company may ask to scan your bank transactions to check your financial behavior or ask for a deposit, similar to a down payment, before giving you a loan.

AFFIRM IS NOT A GOOD IDEA IF YOU:

Can save up. Paying upfront with money you have is cheaper than taking a loan with interest.

Can use a credit card that you pay off in full. If you can pay your balance in full by the next due date, then charging the purchase doesn’t cost any interest. Credit cards offer other perks, such as travel and cash-back rewards or purchase protection for the items you buy.

Pay only the minimum on your credit cards. A loan with Affirm also carries interest, and if you don’t have enough money to pay off your credit card balance, it’s not a good idea to take on more debt.

Affirm personal loan review

Affirm is part of a wave of companies that offer “point-of-sale” financing, which means you will run across it when you are ready to buy something from a retailer. Affirm offers financing for furniture store Wayfair, mattress store Casper, travel site Expedia and others.

The San Francisco-based company runs a real-time, soft inquiry of your credit and decides whether or not to approve you for a loan amount that matches the price of the item you’re buying.

Credit-building: If you’re new to credit or don’t have a high credit score, you may still qualify for a loan, but your rate could be at the higher end. After you receive your loan, Affirm reports payments to credit bureau Experian, so timely payments can benefit your credit score. Each Affirm loan you get will show up as a separate loan on your credit report.

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Loan example: Affirm says the average customer takes a $750 loan and pays it back in nine months at an annual percentage rate of 18%. That translates into a monthly payment of $90 and a total payment of $807.

Customer service: Affirm has an in-house customer service team, says it tracks customer service response times and tries to ensure it resolves customer requests the first time they contact the company.

How Affirm compares

Affirm loans are often compared with credit cards, but it’s better to compare them with other personal loans, which also have fixed rates and terms. Klarna, another point-of-sale financing company, offers a line of credit.

Here’s a rundown between Affirm, Klarna and typical offerings from other online lenders:

 Affirm loanKlarna loanOther personal loans
Used forLoans through retailersLine of credit with online merchantsAny purpose (debt consolidation, large purchases, medical expenses)
Loan amounts$100 - $10,000Minimum of $300 for slice it optionBetween $1,000 and $50,000
APR range10% - 30% (0% available at some retailers)19.99%5% - 36%
Loan duration3, 6, 12, 24 or 36 monthsMinimum of six months2 to 5 years
Time to fundingImmediateImmediateUp to a week
FeesNoneLate feeOrigination fee, late fee
Credit checkSoft checkSoft checkSoft check, followed by hard check

How to apply for an Affirm loan

There are two ways to get an Affirm loan:

  1. Select Affirm at checkout at a partnering retailer, either online or using the app at a store’s checkout terminal, and sign up by providing information such as your phone number, name, Social Security number and email address. Affirm will perform a credit check, and if you are approved, show you loan offers. Select the one you want, set up automatic payments from your bank and complete the purchase. The whole process takes a few minutes.
  2. Apply for an Affirm loan by downloading the Affirm app or signing up through its website. If you’re approved, you’ll receive a one-time-use credit card that you can use to pay at a retailer, either in store or online. You will still have to pay interest on the loan.

NerdWallet recommends comparing borrowing options to find what works best for you. To compare personal loan options, click the button below to see estimated rates from multiple lenders on NerdWallet.

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