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Pay for online purchases over time with Affirm

The alternative payment solution offers competitive financing options with top online retailers

Summary

Affirm offers competitive payment plans with a wide range of repayment terms and interest rates. Learn more about how the service can change your online shopping.

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If you are a frequent online shopper looking for a way to pay off large purchases over time, payment solution Affirm has partnered with thousands of merchants to provide financing solutions. Built right into the checkout of online retailers, Affirm offers competitive payment plans with a wide range of repayment terms and interest rates. In many cases, you can pay off your purchase while accruing very little interest – and boost your credit score along the way.

What is Affirm?

Affirm is an alternative payment solution built right into the site of your favorite online retailers, offering shoppers the ability to split up big purchases over time. From a furniture order from Wayfair to a new Casper mattress or glasses from Warby Parker, Affirm can be used to slowly pay off purchases from top brands.

Affirm offers loan terms anywhere from three to 36 months. Your interest rate could be as low as 0 percent or as high as 30 percent, depending on what each merchant offers. When you pay off a purchase with Affirm, you also won’t have to worry about being charged fees for late payments.

How Affirm works

Affirm is built directly into checkout of thousands of online retailers specializing in fashion, travel, home, electronics and more. Depending on the retailer, Affirm offers financing terms that range between three and 36 months, with interest rates starting at 0 percent. Unfortunately, APRs can reach as high as 30 percent.

To get started using Affirm while you shop, you should first create a free account on the Affirm website. You’ll give some basic information that helps Affirm determine your creditworthiness in order to make checkout faster when you want to apply for a financing plan.

Keep in mind there’s no hard credit pull for using Affirm, but you might not be approved for as good of terms if you are building up your score. Additionally, some Affirm loans are reported to credit bureaus – so you’ll want to ensure you can pay on time to avoid dinging your score.

Once you create your account, you can find online merchants that offer payment plans through Affirm on the service’s website. When you shop with a retailer that offers Affirm financing, you should see the Affirm logo upon checkout – and often throughout product pages as well.

If you find an item you’d like to purchase with an Affirm financing plan, you’ll simply select the option to pay with Affirm on checkout. When you select this payment method, you’ll get a pop-up from Affirm asking you to sign in to your account to see which terms you qualify for. You might also be prompted to provide additional information to help determine creditworthiness.

If you are approved for a financing plan, you’ll see a screen detailing the payment terms offered by this particular merchant.

Then, just select the one that works best for you and complete check out as normal. You can even set up Autopay with the card you link so you don’t have to worry about keeping track of due dates.

Each merchant offers different payment plans, so repayment periods and interest rates can differ drastically from site to site. Be sure to carefully read the terms of your payment plan before purchasing an item.

No matter what interest rate and repayment period your Affirm financing plan comes with, you can rest assured that the service never charges any late fees. You can also pay off your loan early for no fee to save on interest that hasn’t been charged yet.

Pros and cons of paying with Affirm

Choosing an Affirm payment plan can be a great way to pay off a large purchase over time, but since financing terms vary by retailer, it might not always be the best payment option. Here’s are some of the pros and cons of using the service:

Pros

  • Pay off more expensive purchases over time, often with a lower interest rate than a credit card. Some sites even offer interest-free financing.
  • No late fees.
  • Some Affirm loans appear on your credit report and can boost your score.

Cons

  • While Affirm can offer some very competitive interest rates, in many cases the rate you get might not be better than a credit card.
  • Not all retailers accept the payment method.
  • If you return an item, you’ll only be refunded the purchase price, not any interest you’ve paid.
  • Not all Affirm loans appear on your credit report, so they might not help your score.
  • You can’t pay with a credit card.

Tips for maximizing Affirm payments

If you decide that an Affirm payment plan makes the most sense for your purchase, keep the following tips in mind to make the most of the offer:

Always pay on time

While Affirm does not charge a late payment fee, you should be careful to make your scheduled payments on time. Since some Affirm loans are reported to credit bureaus, late payments can damage your credit score. You are also less likely to be approved for a new financing plan if you have a history of late payments.

Don’t take on too many plans at once

Affirm allows you to take out payment plans with multiple merchants, but be careful not to take out more than you can pay off. It can be tempting to finance all your major purchases with Affirm, but you should avoid overextending your budget.

Keep a close eye on your credit report

Not all Affirm loans are reported to credit bureaus, but some are. Additionally, there is no hard and fast rule to know if your Affirm loan will be reported. You will want to keep careful track of your credit score and report to monitor how your payment plans affect them.

Other installment plan services

If you are looking for a payment plan solution, there are plenty of services to choose from beyond Affirm. If you have an American Express card, you can take advantage of “Pay it Plan it,” the issuer’s own solution for paying off large purchases over time. Beyond this offering, plenty of third-party services have popped up over the last few years, each with their own unique benefits.

Afterpay

  • Pay in four equal installments, spread over six weeks.
  • Zero interest and no fees when you pay on time.
  • 25 percent of the balance is due at the time of purchase.

QuadPay

  • Pay in four equal installments, spread over six weeks.
  • Zero interest and no fees when you pay on time.
  • 25 percent of the balance is due at the time of purchase.

Klarna

  • Pay in four equal installments (spread over six weeks), 30 days after purchase or select from three to six month financing plans.
  • No interest or fees for installment or 30-day plans. Competitive interest rates for financing plans.
  • App allows users to pay in installments with any online retailer.

Final thoughts

Affirm offers plenty of great payment solutions for frequent online shoppers, but you should keep a watchful eye on your plan’s terms to make sure you are getting a good deal. While many Affirm payment plans can save you in interest charges, that might not always be the case.

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Published: August 12, 2019

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