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Affirm Personal Loan: 2018 Review

Loans, Personal Loans, Personal Loans Reviews
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affirm-logotype-b275b294Affirm 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 may be a good option if you:

Must buy something immediately 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.

Can pay the loan off within a year. Affirm offers loan terms of three, six or 12 months, so you need to have the funds to pay the loan off within one of those time frames. The sooner you pay off the loan, the less interest you will pay.

Have a 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.

Don’t want a hit to your credit score. The company says it never conducts a hard credit check, which could temporarily affect your credit score. Affirm uses only soft credit checks and runs its own algorithm to check if a borrower is creditworthy. 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 afford to wait and save for the purchase. Obviously, 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.

Pay only the minimum on your credit cards. Paying off your credit card balances in full every month is the best way to avoid interest charges. A loan with Affirm also carries interest, and if you don’t have enough money to pay your credit card, it’s not a good idea to take out another loan.

Affirm at a glance

APR range10.00% to 30.00%
Loan amount$100 to $10,000
Time to fundingImmediate
Origination feeNone
Soft credit check with application?Yes

» MORE: How to build credit

Affirm personal loan review

To review Affirm, NerdWallet collected more than 30 data points from the lender, viewed the online loan application process, and compared the lender with others that seek the same customer or offer a similar personal loan product. Loan terms and fees may vary by state.

Affirm is part of a wave of companies that offer “point-of-sale” financing, which means you will encounter it when you are ready to buy something from a retailer. The San Francisco-based company runs a real-time check 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.

Affirm partners with such businesses as furniture store Wayfair, mattress store Casper and travel site Expedia. The company may offer qualified borrowers a 0% financing option at some retailers for a limited period of time.

Unlike most lenders, Affirm conducts only a soft inquiry of your credit report. It pulls your information from credit bureau Experian and reports payments to it, so timely payments can benefit your credit score. The loan shows up in the installment section of your credit report, unlike a credit card, which is considered revolving debt. Each Affirm loan you get will show up as a separate loan on your credit report.

» MORE: How to read a credit report

If you’re new to credit or don’t have a high credit score, you can still apply for a loan, but your rate could be at the higher end. Affirm says the average customer takes a $750 loan and pays it back in nine months at an annual percentage rate of 21%.

The company bills itself as a simpler alternative to credit cards because it doesn’t charge fees, even for late payments.

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. Here’s a rundown between an Affirm loan and typical offerings from other online lenders:

 Affirm loanOther personal loans
Used forMaking a purchase at a retailerAny purpose (debt consolidation, large purchases, medical expenses)
Loan amountsBetween $100 and $10,000 depending on retailerBetween $1,000 and $50,000
APR range10.00% to 30.00%5.00% to 36.00%
Loan duration3 to 12 months2 to 5 years
Time to fundingImmediateUp to a week
FeesNoneOrigination fee, late fee
Credit checkSoft checkSoft check, followed by hard check

How to apply for an Affirm loan

There are two ways to get an Affirm loan:

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.

Apply for an Affirm “credit card” by downloading the Affirm app or signing up through its website. If you are approved, you will be given 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.

If you want to compare an offer from Affirm with those from other lenders, click the button below to fill out a pre-qualification form. NerdWallet will check its lender marketplace and display the loans and rates for which you qualify. Pre-qualifying won’t affect your credit score.

More about Affirm

Affirm loan requirements

  • Minimum credit score required: None
  • Minimum gross income required: Not provided
  • Minimum credit history: None
  • Maximum debt-to-income ratio: Not provided

Affirm lending terms

  • APR range: 10% to 30% (0% at some retailers)
  • Minimum loan amount: $100
  • Maximum loan amount: $10,000
  • Loan duration: 3 to 12 months (some retailers may offer shorter or longer terms)
  • Time to receive funds: Instantly

Affirm fees and penalties

  • Origination fee: None
  • Prepayment fee: None
  • Late fee: None
  • Personal-check processing fee: None

Before you take a personal loan

Learn how personal loans work

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