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Affirm Personal Loans: 2018 Review

Loans, Personal Loans, Personal Loans Reviews
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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 - $10,000
Typical APR10% - 30% (0% available at some retailers)
Origination feeNone
Time to fundingImmediate
Repayments3, 6, 9 or 12 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: How to build credit

Is Affirm right for me?

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.

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 do not have a credit card. Affirm says it 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. 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 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 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.

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 21%. That translates into a monthly payment of $90.79.

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

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:

  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.

Before you take a personal loan

Learn how personal loans work

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Learn about credit-builder loans

Updated March 20, 2018.

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