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An alternative to credit cards for online purchases, but with some limitations.
We outline what you need to know to determine if Affirm is the right borrowing option for you.
|Product Name||Affirm Personal Loans|
|Max. Loan Amount||$17,500|
|Interest Rate Type||Fixed|
|Maximum Loan Term||1 year|
|Requirements||Must be a US citizen or permanent resident, be age of majority in your state, and have cell phone service and agree to text alerts from affirm.|
- Age 18 or older (19 in Alabama)
- US citizen or permanent resident
- Have cell phone service and agree to text alerts
- Must not live in Iowa or West Virginia
What is Affirm?
Affirm is a financing provider designed to help you get your online purchase immediately — without a credit card — and pay for it in fixed installments at more than 150 online merchants within travel, furniture, jewelry, fitness and more.
At checkout with its partners, you simply choose Affirm as your method of payment. If Affirm approves your loan, you see the details of your potential loan before you commit, including a monthly repayment amount, repayment terms and the total interest you’ll pay on your purchase once it’s paid off.
Your loan is then due up to a year after the purchase at an APR that varies by creditworthiness.
- Affirm partner merchants include a range of online niche stores specializing in products such as furniture, memory foam mattresses, luxury watches, designer apparel, electric bikes and more.
How does borrowing through Affirm work?
An Affirm loan can be up to $17,500. It doesn’t appear there’s a limit on how many times you can borrow through the provider. Rather, Affirm assesses each loan request to determine if you qualify for the full amount you’re looking for.
Unlike other lenders or credit cards, Affirm performs a soft pull on your credit, meaning you won’t have an inquiry listed on your report. You could improve your credit with positive repayment history with Affirm — it reports your payments to the credit bureau, Experian.
Once you get a loan, you’ll be notified with a text or email before each monthly payment is due. Choose to pay with ACH transfer, debit card or check. If you choose to pay back your loan sooner, you’ll save on interest and won’t be charged a prepayment fee.
How much does it cost?
You won’t find fees for using Affirm: no late fees or no prepayment fees. You’ll be charged simple interest on what you borrow. Affirm makes it clear how much you’ll pay once you apply for your loan. For example, if you borrow $500 and are offered a 20% interest rate, paying back your loan over three months would cost $516.75 — or $16.75 in interest.
If you’re required to make a down payment on your purchase, it means you weren’t approved for the full amount. Make your down payment with a debit or credit card, and Affirm covers the rest.
What are the benefits of an Affirm personal loan?
- Extra security. Because you don’t provide a credit card number, and purchases are made through Affirm, you benefit from an extra layer of protection against identity theft or fraud.
- Flexible payback terms. Depending on how much you can afford to pay each month, choose payback terms of three, six or 12 months using online payments, debit cards or checks.
- No prepayment penalties. Save money and improve your credit score by paying back your loan early — with no prepayment penalties.
What to watch out for
- Limited merchants. With Affirm, you’re limited to the approximate 150 online merchants it works with.
- Interest often higher than credit cards. Depending on your credit, you may have to pay up to 30% in interest on your purchase.
- Borrowing more than you can afford. While Affirm doesn’t charge anything beyond interest, it’s still a loan. Make sure you’re able to repay any amount you borrow.
- Potential difficulty with returns or cancellations. Since the purchase isn’t put on your credit card, a potential downside is that it may make returns or cancellations more difficult.
Compare more personal loan options
Affirm isn't a line of creditAlthough you can apply for multiple loans through Affirm and have the potential to be approved for all of them, Affirm doesn’t offer a line of credit and isn’t a credit card. Each loan is separate and while the interest can be high, it doesn’t compound like a credit card.
Rather than having open terms that could last multiple years, Affirm loans have a defined end — usually a few months, rather than years. In addition, the payments are kept low. While you can borrow up to $17,500 for an online purchase, your current financial situation determines how much you can actually afford — and Affirm won’t extend a loan if you won’t be able to make the monthly payments.
Keep this in mind before you borrow. Each loan with Affirm is separate, and just because you’re approved once doesn’t mean you’ll be approved if you choose to apply again later.
Online reviews of Affirm
Affirm earns an A+ rating on the Better Business Bureau (BBB) website, with positive reviews about its speed and ease of lending. But of its 19 customer reviews, 16 are negative, citing unprofessional staff and trouble closing an account.
Trustpilot gives Affirm 2 out of 5 stars, offering many of the same complaints. Other customers report loan denials, but Affirm looks at each loan request to determine if you qualify, which may have been the case here.
Am I eligible?
To sign up for an Affirm account, you’ll need to meet the following criteria:
- You must be at least 18 years old (19 in Alabama).
- You must be a citizen or permanent resident of the US.
- You must have cell phone service and agree to text alerts.
How do I apply?
You have to options: create an online account with Affirm or choose Affirm as your payment method when checking out on one of its online partner merchant sites.
To create an account directly with Affirm:
Once you have an account, you can now apply for a loan through Affirm for purchases at its partner merchants.
Each inquiry begins with a soft check, meaning it won’t show up on your credit report. You’ll learn whether you’re approved shortly after. Affirm may require you to provide information about your checking account to verify your identity and ability to pay.
If you’re offered a loan, confirm it to finalize your purchase. You may be asked for a down payment if you don’t qualify for the full amount of your requested loan.
I got the loan. Now what?
After your loan is disbursed, Affirm will text and email information about upcoming payments. Each payment is due one month after Affirm processes your loan.
As with all loans, be sure to pay your monthly bill on time. While Affirm doesn’t charge a late fee, it reports your payments to Experian, so missing a payment could negatively affect your credit score.
If you want to avoid racking up debt on your credit cards and you shop through one of its partner sites, Affirm can be a no-fee borrowing alternative that can also help you build your credit. Affirm offers a free app that’s quick and easy to use, getting you the financing you need — without the hassle of extra fees or a line of credit.