Affirm Review: Instant Personal Loans with High Interest Rates for Consumer Purchases

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In general, we wouldn't recommend using Affirm to finance your purchases due to high interest rates and preferable financing alternatives. Affirm allows consumers to finance purchases at more than 1,000 online retailers, such as Wayfair, Expedia and Reverb, by offering an instant loan option at checkout or by applying for a one-time-use virtual card that can be used online or in select stores. It is essentially a combination of a credit card and personal loan, allowing consumers to purchase items usually bought with a debit or credit card and pay for them in high-interest monthly installments.

Affirm Review: Should You Apply?

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Generally speaking, we don't recommend that consumers use personal loans to pay for discretionary purchases, such as TVs or furniture. Affirm only makes sense if you can qualify for the company's interest-free financing, which is offered in more than 150 partner merchants, or if you want to finance educational or medical services. If you can't qualify, you're better off looking for a 0% interest credit card.

ProsCons
  • Some retailers offer a 0% annual percentage rate (APR).
  • Useful for consumers without credit cards.
  • Good for financing medical and education products or services.
  • Interest rates are higher than credit cards.
  • Promotes poor spending behavior.
  • Borrowers will carry a balance.
  • Can negatively affect your credit score.

There are a few instances when taking out financing through Affirm can make sense: if you can qualify for a 0% APR or if you're looking to finance educational services or medical procedures. Some retailers that partner with Affirm offer 0% financing, making this a more cost-effective option compared to an interest-bearing credit card. Affirm may also be useful for educational services, such as taking an LSAT preparation course, or buying medical products, such as hearing aids.

The biggest disadvantage of Affirm is that it promotes poor spending behavior by allowing you to purchase items that should not require taking out a loan, like furniture, apparel and car accessories. Most purchases from retailers should either be paid for by debit or credit card; and in the case of a credit card, you should plan to pay off the balance before you incur interest. Taking out a personal loan from Affirm ensures you'll carry an interest-bearing balance, which is what consumers should avoid for discretionary purchases. If you do plan on carrying a balance, most credit cards have lower average interest rates than Affirm, so it would make more sense to use your credit card.

Eligibility Criteria

Affirm is not available to Iowa or West Virginia residents. To qualify for an Affirm personal loan, you must:

  • Be at least 18 years old.
  • Have a valid U.S. or APO/FPO/DPO home address.
  • Have a valid U.S. mobile or VoIP number and agree to receive SMS messages.
  • Have a verifiable email address and date of birth.
  • Provide the last four digits of your Social Security number.

Affirm Personal Loan Rates, Terms, and Fees

Affirm provides personal loans with interest rates from 10% to 30% with no other fees. Depending on the retailer, some Affirm loans offer a 0% APR, which could be a good option for consumers who need time to pay off the loan. Generally, loan terms are three, six or 12 months; but select merchants may offer different terms, such as a 30-day payment option for purchases under $50. If a retailer allows you to use Affirm for purchases between $50 and $99.99, you must choose between a loan term of three months or six months.

Loan Amount Range$100 - $10,000 (some retailers may allow purchases under $100)
APR Range10.00% - 30.00% (0% APR offered at select retailers)
FeesNone
Loan Terms3, 6 or 12 months (some retailers may offer different terms)
Repayment OptionsMonthly (some retailers may offer daily or weekly repayment options)
Direct Payment to CreditorsYes

Application Process

You can apply for an Affirm loan at checkout through online partner websites or by making an Affirm account and applying for an Affirm virtual card. Most people find out about this option at the checkout page on partner retail websites.

Affirm at Checkout

Affirm has partnered with more than 1,000 merchants including Wayfair, Casper, Motorola and Expedia. To apply at checkout, select Pay with Affirm. You will then be prompted to enter your name, email address, mobile number, date of birth and the last four digits of your Social Security number. Affirm will send you a text message with an authorization code to verify your identity, which you must enter into the application form. Affirm will perform a soft credit check and notify you within seconds whether you are approved, the loan amount you're approved for, the interest rate, the loan term and your fixed monthly payments. If you want to accept the offer, you must click Confirm Loan to complete the process.

Application ProcessOnline (at partner website or by creating an account with Affirm)
Time to Get FundsImmediate
Credit Check
  • Soft credit check when you apply
Credit ReportingYes
Cosigners/Co-borrowers Allowed?No

Affirm Virtual Card

Affirm offers a virtual card on its mobile app that can be used for one-time purchases online and in select stores. In order to apply for Affirm's virtual card, you'll need to download its mobile app. Through the app, you'll choose a store where you would like to use Affirm and then enter the purchase amount. For the loan amount, you must round up your purchase to the nearest dollar, including taxes and shipping. You will receive a real-time credit decision, which shows the amount you're approved for and the interest rate. You can then choose your monthly payment plan, and Affirm will automatically put the funds on a one-time-use virtual card.

How Does Affirm Compare to Other Financing Options?

Before you consider Affirm, consider if the following options make more sense for your situation.

Affirm vs. Credit Cards

Most times, using a credit card is a better option compared to Affirm because you can purchase items and repay within the month without incurring interest. Credit cards are similar to Affirm in terms of the types of purchases they are used for such as furniture, travel and electronics. One key difference between these two financing options is that credit cards are a revolving line of credit that should be used as a short-term solution to pay for items or services. Affirm, on the other hand, promotes carrying a balance by encouraging customers to pay for products in monthly installments with interest. Furthermore, credit cards tend to have lower interest rates than Affirm, making it a better option if you do need to carry a balance. Unlike credit cards, Affirm doesn't charge any fees—including late fees. But credit card fees can arguably be seen as incentives to pay on time. Although Affirm won't charge a late fee, it may report any late payments to the credit bureaus, which will hurt your credit score.

Affirm vs. Other Personal Loans

If you must use a personal loan to make a big purchase, consider alternative personal loans with lower interest rates. Affirm doesn't exactly function like most personal loans. Generally, personal loans are used for purchases of around $50,000 or more—like large purchases and projects, debt consolidation or medical expenses. In contrast, Affirm can only be used for purchases up to $10,000 from select merchants. Unlike most personal loans, you'll get an immediate loan decision and financing after Affirm verifies your identity and performs a soft credit check. The process for other personal loans usually takes about a week and includes both a soft and hard credit check. However, many other personal loans have lower interest rates than both Affirm and credit cards.

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