Affirm is a buy now pay later service that provides users with a maximum spending limit of up to $17,500, which can be used to purchase products online.

What is Affirm?

When it comes to making large purchases without paying upfront, today's consumers have access to several different kinds of financing options. In some cases, you can acquire a credit card or secure a personal loan. One of the financing options that has been trending is called the buy now pay later (BNPL) service. Buy now pay later services essentially operate like a loan and gives consumers an alternative way to pay for large purchases online. With a buy now pay later service, individuals with less than stellar credit are able to acquire a product at their time of purchase, as to which they pay off over a set period of time.

One of the BNPL companies that have been highly praised for providing quality services is Affirm. Affirm is a BNPL company that finances large purchases as to which a customer has to repay over a period of up to 36 months, with no additional fees. Unlike a typical credit card, Affirm charges what's known as 'simple interest' on their loans. Because of the fact that the company doesn't charge any additional fees, consumers will never have to pay more than the agreed upon amount, unless they make a late payment. Affirm can be used via web browser or through its app which is available for both Android and Apple devices. Consumers have the option of being able to shop online or directly through the app, at over 10,000 retailers such as eBay, Walmart and Amazon. From within the app, users are able to access their account to browse different retailers, view their shopping history and make purchases. Users also get detailed information such as their payment history, payment schedule and spending limit. From within the app, users get a virtual credit card which can be used anywhere a traditional visa card is accepted. Additionally, if users want to receive a refund or need to return a product, they can do it from within the app regardless of which retailer they wish to return the product to.

Features and Benefits

The process of getting a loan from Affirm is fairly straightforward. Upon downloading the app and opening an account by providing some basic information, consumers receive a pre qualification notification entailing the maximum spending limit that they're eligible for. The limits a consumer gets varies but the maximum amount an individual can receive is $17,500. Every time a consumer attempts to make a purchase, said transaction has to be verified by the company, regardless if the purchase is below their spending limit. Customers can browse a variety of partnered retailers through the app as to which they can add items to their shopping cart. During the checkout phase of the purchase, consumers are presented with various payment options such as the standard pay in 4 weeks option. Consumers have to submit their routing and tracking number for a bank account that they own, prior to acquiring a loan. Payments are subsequently taken out from the bank account that users list on their profiles, according to the payment schedule that they choose. Even though the company doesn't charge a late fee if payments are late, it can affect your ability to use their services in the future.

The type of interest rates that customers get is based on their credit history and the retailer they wish to purchase from. For example, if you have less than stellar credit, you may be required to make a 25% deposit towards your purchase. Meanwhile, some retailers such as Casper, Dyson and Ring provide 0% interest rates. In general, users can expect to pay an interest rate between 10 and 30 percent. However, since the company charges simple interest, as opposed to compound interest, consumers' payment schedule remain the same throughout the entirety of their payback period. As mentioned above, while consumers don't have to pay a late fee, for late payments, it may affect their ability to use Affirm in the future and it can have a negative impact on their credit score.

Unfortunately, getting in contact with Affirm's customer service department can prove to be rather difficult. As opposed to giving users an email address or phone number they can use, consumers are only able to get support via their help center menus. Essentially, users don't have the option of being able to talk to a human being in real time. Instead, if users aren't able to solve their issues by browsing the help center menus, the only way they can speak to a representative from the company is to send a physical letter to their customer care team which is located in Pittsburgh, Pennsylvania. It's also worth noting that besides shopping, users can also open a high-yield savings account from within the app. The Affirm savings account doesn't have any minimum balance requirements or monthly fees. As such, users can easily open a savings account with a few dollars.

Pros

• Users have access to an abundance of popular retailers which provide 0% interest rates.
• Maximum spending limit of $17,500.
• The company doesn't charge users any additional fees such as late fees. But, since late payments may have a negative impact on your credit score, it may affect your ability to use Affirm in the future.

Cons

• Prequalification doesn't necessarily mean that every transaction will be approved.
• Even though the company conducts a soft inquiry which does not affect your credit score, most BNPL lenders don't check your credit history at all.
• In some instances, interest rates can get as high as 30%.

Is Affirm The Right BNPL Service For You?

Affirm is ideal for individuals who don't have an excellent credit score and are unable to secure a credit card. However, most experts agree that it's not a good solution for impulse shopping, because monthly payments can stack up fairly quickly. In the same breath, if you plan to make a large purchase and remain confident about your ability to repay the loan on time, Affirm may be the BNPL service what you need.