Affirm is a buy-now-pay-later company that was launched in 2012 by PayPal co-founder Max Levchin. These days, it seems to be just about everywhere, offering you the option right during the checkout process to split your purchase up into several payments over time.
Business is booming, too. Revenue was up by 46% in its fiscal year 2024, compared to 2023. Affirm is meant to be quick and easy, which means it's a good idea to ensure you're not paying for convenience in the form of higher costs.
How Does Affirm Work?
Affirm offers several services, such as a savings account and a debit card. However, its bread and butter is buy-now-pay-later loans you apply for when you make an online purchase. To do this, it partners with retailers directly to customize loan options that may be different from merchant to merchant.
If you select the Affirm payment option at checkout, Affirm will check your credit, your Affirm payment history, and other factors to decide whether to approve you for a loan or not.
If approved, you'll choose from a few different plans. Depending on how much you're buying, you'll get the choice to pay the item off in anywhere from eight weeks to 36 months, although three, six, or 12 months are more common.
Once you select a plan that works for you, your purchase will ship to you, and you'll pay it back over the next few months (in most cases). In some ways, it's like a reverse layaway plan.After you use Affirm to pay for a purchase, the seller will be paid in full so that you can receive your purchase just like you would if you paid with a credit or debit card.
The minimum amount you can borrow with Affirm varies by merchant, but, generally, the minimum purchase size is $50. You may be able to borrow more than $5,000, but the maximum amount varies by merchant, too.
Is There a Credit Limit?
Affirm does not have a set credit limit. Instead, the company decides your eligibility and loan limit on a case-by-case basis, considering factors like your credit score, past payment history on Affirm loans, and your ability to pay. This means that you may be able to be approved for more than one loan at a time, depending on your situation.
Note
You can boost your odds of approval for future Affirm loans by paying off your current Affirm loans on time and working to increase your credit score.
Does Affirm Affect Your Credit Score?
The short answer is yes. The way you pay your account can affect your credit score.
Affirm generally will report your payment history to one credit bureau: Experian. There are a couple of cases where it won't, however:
- You're paying back a four-month loan with biweekly payments at 0% APR.
- You were offered just one option of a three-month loan at 0% APR during checkout.
Note
If you pay late, Affirm will report this to Experian without exception. In the two cases above, you don't get any credit for making on-time payments, but if you pay late, Affirm will report this.
What Credit Score Do You Need to Use Affirm?
Affirm doesn't disclose what credit score you need to be approved. However, in general, the better your credit score, the better your odds of being approved. If you're denied a loan, it could be for several reasons unrelated to your credit.
Does Affirm Charge Interest?
Affirm charges interest ranging from 0% to 36% APR.
Affirm can offer many loans at 0% interest because it negotiates how loans work individually with each merchant. Some merchants may be more inclined to offer 0% loans just to get people to buy their products. However, you may still need to meet certain requirements to get that interest-free loan.
Note
You can make extra payments or pay off your loan at any time. If you do so, you'll save money because interest will accrue more slowly on a smaller balance.
Is Affirm Safe?
Buy-now-pay-later merchants like Affirm generally don't offer as many consumer protections as credit cards. You don’t have zero-liability fraud protection or the insurance-style benefits many credit cards provide.
They're also so seamless to use that you might be tempted to buy more than you need. In contrast, taking out a normal personal loan is a more formalized process that makes you reflect on whether you need to borrow the money. Buy-now-pay-later lenders remove that speed bump.
In addition, Affirm may allow you to sign up for multiple loans at once, each of which can have different payment due dates. You can't combine them all into one loan, so managing multiple Affirm loans can get quite complicated.
Which Retailers Use Affirm?
One of Affirm's strengths is that it's integrated into the checkout process at many retailers: more than 245,000 different merchants, to be specific. Here's an example of some retailers that have partnered with Affirm to offer loans in online stores:
- Adidas
- Best Buy
- Expedia
- Dyson
- Nike
- Peloton
- Pottery Barn
- Walmart
How to Use Affirm Online
There are several ways to use Affirm funding while shopping online:
- Partner retailers: Affirm partners with many retailers that allow you to add your purchases to your cart and then apply for an Affirm loan right during checkout.
- Affirm website: You can easily find Affirm partner retailers directly through the Affirm website.
- Affirm app: Another way to find Affirm partner retailers is by shopping through the Affirm app.
- Affirm card: You can apply for an Affirm loan for just about any merchant—partner retailer or not—through the Affirm website. If approved, you'll get a card that you can use just like a credit card number to pay for anything up to your loan limit.
How to Use Affirm at Stores
You can use an Affirm loan to buy things directly from brick-and-mortar stores. You'll need to apply for an Affirm card. You can then load this card to your smartphone with Apple Pay or Google Pay and use it to pay in person.
How Do Returns Work When Using Affirm?
If you're not happy with your purchase, you can return the item and have the merchant credit your refund to your Affirm loan balance. Depending on the store's policies and how much you owe, two things could happen:
- The merchant only refunds a portion of the cost: You may still have an outstanding Affirm balance in this case, which you'll still need to pay off even though you don't have the product anymore. Your payments will stay the same but you'll have fewer of them, and your final payment may be for a smaller-than-normal amount.
- The merchant refunds the entire cost: In this case, you might get back more than you owe on your Affirm loan. Affirm will then zero out your balance and return any overpayment to your original payment method or by check.
How Do I Pay My Affirm Balance?
You can set up automatic payments or make manual payments. To make a manual payment, you'll need to log into your online Affirm account or schedule a payment through the app. You have a few choices for how to make your payments:
- Check
- Debit card
- Bank account transfer
- Credit card (only in some cases)
Frequently Asked Questions (FAQs)
Can I use Affirm to pay bills?
No. Affirm's terms of use prohibit using an Affirm loan to pay other debt, such as your credit card bill. And you can't use Affirm to pay utilities or other bills, either.
Does Affirm check my credit score?
Yes. Affirm will check your credit when you apply for a loan. The eligibility requirements may change from merchant to merchant, too, because Affirm negotiates individually with each merchant offering Affirm loans.
What happens if I don't pay my Affirm balance?
Affirm doesn't charge any fees at all, so it won't charge you any late fees. However, if you don't pay your loan, or if you pay late, Affirm will take this into account when deciding whether to approve you for future Affirm loans. Late or non-payments will be reported to Experian, and that can damage your credit score. If you don't make payments for more than 120 days, Affirm may charge off your loan.
