Is Affirm Safe for Personal Loans?

FT Contributor  | 

Affirm is a company that offers point-of-sale credit and personal loans for one-time purchases. These personal loans are offered right at checkout when you’re making a large purchase with a retailer or you can apply for a loan on the company’s website. The loan is unique because it’s strictly used for a purchase through a participating retailer and there are several loan options usually provided.

While Affirm makes it easy to apply for credit for a purchase, it’s important to understand the personal loan amount and terms of the loan before agreeing to it. When checking out, you may feel rushed to agree to a loan so your transaction is completed quickly. Learning more about Affirm, including its pros and cons and the application process, will help you prepare for the next time you face the choice of applying for a loan at checkout.

Pros and Cons

You may be offered an Affirm loan when you check out with a retailer for a large purchase. Before you apply, review the pros and cons of this loan.

Pros Cons
  • Easy purchase experience: Since the Affirm option is offered at checkout, you can complete the application and approval process in minutes.
  • Not enough time to review: If you’re at the checkout and offered an Affirm loan, you may feel rushed and might not have enough time to review the terms and conditions.
  • No hard credit history inquiry: Affirm only makes a soft inquiry on your credit, so it doesn’t negatively affect your score.
  • Your credit history determines your annual percentage rate (APR): Affirm uses a soft credit inquiry to review your history and determine the loan offers you’ll receive.
  • Loan options: When you apply for an Affirm personal loan, the company generally provides a few payment plan options to choose from.
  • You may need a down payment: Depending on your financial situation, you may need to provide a down payment to finance the rest of your purchase.
  • A personal loan may have better rates: Affirm is known to offer loans with a 0% to 30% APR depending on your credit score, which may be higher than other personal loans.

Affirm Personal Loan Essentials

The Affirm loan terms you’re offered depend on the purchase you’re making and your credit score. It’s important to note that Affirm has:

  • Interest rates from 0% to 30%, depending on your credit score and history.
  • No late payment, penalty, or origination fees.
  • No loan amount limit, but the amount you qualify for depends on your financial situation.
  • A loan term of three, six, 12, 24, or 36 months, or longer at some participating retailers.
  • No minimum credit score for approval, but your credit history, debt-to-income ratio, and current economic conditions are evaluated.

Loan applicants must be at least 18 years old and have a valid Social Security number to apply. They must also have a mobile phone number to provide and the purchase must qualify for an Affirm loan. The company doesn’t offer loans for:

  • Weapons, including any parts or accessories.
  • Drug paraphernalia, narcotics, or illegal activities.
  • Loan or credit card payments or cash advances.
  • Cryptocurrency or money transfer services.

Affirm loans are only used for one-time purchases, so you can’t apply for this loan to consolidate debt, pay medical bills, or cover student loan payments.

Affirm Review

Affirm is a unique personal loan option that’s only designed to help finance one-time purchases. Understanding who the loan is best for and the approval process will help you decide if it’s a good choice for your next large purchase.

Who Is Affirm for?

An Affirm personal loan is best for borrowers who have a relatively good credit history. With poor credit history, a borrower may only qualify for a small loan amount with a high-interest rate.

Borrowers who don’t have enough cash to cover a purchase may benefit from applying for an Affirm loan. However, if a consumer does have the money to pay for an item or has the ability to put the purchase on a credit card and pay it off, they’re usually better off using this payment method. An Affirm personal loan is likely to accrue interest, making the purchase price higher and not financially beneficial.

How Long Does It Take to Get Approved?

When you check out with a retailer and apply for an Affirm personal loan to cover your purchase, you’ll receive instant approval or denial. You provide your personal details and the company performs a soft credit inquiry.

If you’re approved, you may be offered several loan options. Affirm is required to abide by the Truth in Lending Act (TILA), so extensive information on the interest, fees, and payments you’re responsible for must be provided upfront. You choose the loan option that works best for you and create an account on the Affirm website or mobile app to begin making payments towards your loan balance.

How to Apply

When you checkout with a large purchase through a participating retailer, you’ll see an Affirm personal loan as a payment option. When you choose this option, you’re required to provide your contact information and Social Security number so the company can run a soft credit inquiry.

Once approved, choose your loan option and use it to pay for your purchase. You’re emailed or mailed loan information, including how to sign up on the website or mobile app to make payments.

To apply for a loan yourself, visit the Affirm website, create an account, and provide your information when prompted. Once you’re approved and you’ve chosen the loan option you want, you can make loan payments through your Affirm account, either online or in the mobile app. Affirm sends you a one-time use credit card with the loan amount and you can use it to make your purchase.

If you’re making a big purchase, an Affirm loan is a convenient way to finance the amount quickly. However, it’s important to review the loan terms and other potential methods of payment before agreeing to a personal loan.


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