Affirm is a financial technology company that provides installment loans to consumers for online purchases. The company was founded in 2012 and is based in San Francisco, California. Affirm allows customers to split the cost of purchase into smaller, fixed payments over time, with clear terms and no hidden fees. It partners with retailers to offer its financing options at checkout and also offers personal loans directly to consumers.
How Does Affirm Work?
Once the loan is approved, the customer will be presented with the loan terms, including the total cost of the purchase, the number of payments, and the amount of each payment. If the customer accepts the terms, they can complete the purchase and begin making payments. Affirm will send payment reminders and allow customer to view their loan details and make payments online.
Customers can also apply for personal loans directly from Affirm’s website. In this case, customers will have to provide their personal and financial information, Affirm will check the creditworthiness and provide loan options and terms. It’s important to note that Affirm charges interest on its loans and that the interest rate will depend on a variety of factors, including the customer’s creditworthiness, the loan amount, and the loan term.
How to apply for a loan with Affirm?
It’s easy and simple to apply for a loan with Affirm, and you might have access to the money right away to pay for your purchase. You can visit the website, the app, or the website of a partner retailer to submit an application for an Affirm loan.
Obtain loan prequalification:
With the help of Affirm, customers may prequalify for a loan without having their credit score affected.
You’ll need to submit your phone number and some basic personal information, including your birthday and the last four digits of your Social Security number, to verify what rates and quantities Affirm might be able to provide you. Even though Affirm takes other factors into account when determining whether to approve you for a loan, raising your credit score can increase your chances of getting authorized or qualifying for better interest rates.
Select your pricing and conditions:
You will be able to see your offered interest rates and loan terms as well as the amount for which you have been authorized once you have applied for a loan through Affirm. You can then select the details of your loan from there.
Make regular payments:
Once your purchase is complete, you can begin making monthly payments. You can receive reminders from Affirm regarding the approaching payment deadline. Your first Affirm payment won’t be required until 30 days after you purchase your good or service, even if you might be required to make an initial down payment.
How do I get Affirm approved?
You must be at least 18 years old, a resident of the United States, have a Social Security number, and have a registered phone number in the United States that can receive texts in order to be eligible for Affirm. Decisions regarding loan approval are made instantly, according to Affirm. Your credit score, past payment history with Affirm, including any loans you may have that is still owing, and the length of time you have had an account with Affirm will all be taken into account. Your salary, credit card usage, outstanding debt, and any recent bankruptcies are all factors considered by Affirm.
Since Affirm evaluates each application separately, it’s possible that you’ll be granted a loan at one location but denied at another. An email stating your rejection will be sent to you.
Does Affirm run a credit check?
A soft credit draw is used by Affirm to check your credit this doesn’t lower your credit score. Affirm takes into account your credit score as part of your application, even if there is no minimum.
Increase Credit Limits
There isn’t a set minimum or maximum credit limit for Affirm. Although the maximum purchase amount is $17,500 as previously mentioned3, your specific credit limit is based on factors such as:
- History of your credit
- Your Affirm payment history
- How long have you had an Affirm account?
- The interest rate that the business where you’re applying is offering
All of this indicates that more than one Affirm loan may be approved simultaneously with more than one merchant. According to Affirm, it also considers the state of the economy, so whether you are approved and what your credit limit is may rely on factors other than your credit history.
Increase Credit Limits: How to Do It
There are a few things you might be able to do to increase your credit limit if you’re originally approved for a loan with Affirm but were hoping for a bigger credit limit. First, you can repay your existing Affirm loan according to plan. As previously indicated, when accepting you for new buy now, pay later agreements, Affirm considers how you’re managing existing debts.
The next step is to improve your credit score overall. Paying your bills on time, paying down debt, and minimizing the number of times you apply for new credit can all help you acquire a bigger credit limit from Affirm or any other lender.
Do you need to utilize Affirm?
Affirm is a trusted source of BNPL loans and provides more choices for repayment than other lenders.
But delaying a purchase for a longer amount of time isn’t always a smart move, especially if it’s something you don’t need. Before accepting the loan’s terms, carefully examine how long you will be in debt and whether you will pay any interest. If any of the following apply to you:
Receive a loan with no interest: Zero-interest financing is provided by some Affirm merchants, including Amazon, Peloton, and Neiman Marcus. You can divide your purchase into installments with no extra fees as long as you pay your bills on time.
To pay for a significant expense: Affirm is a solution to obtain your thing now and pay later if there’s a big-ticket item you need to buy but can’t afford upfront (like a new mattress or computer). The longer terms it offers compared to other BNPL suppliers may make your monthly payments quite inexpensive.
Unable to obtain a credit card: For borrowers without a history of good credit, qualifying for a BNPL plan may be simpler than qualifying for a credit card. The business claims that Affirm never performs a hard credit check and takes other information into account in addition to your credit score when determining whether to accept or deny you for a loan. If any of the following apply to you:
Want to establish credit using a BNPL plan: For certain of its loans, Affirm provides Experian with a payment history, but this information isn’t guaranteed. Going with a financing option where payments are always reported, like a personal loan or credit card, is excellent if building credit is a priority for you.
Prefer to speak with people on the phone about problems: Users must use chat, email, or social media to get in touch with Affirm if they experience issues with their BNPL plan. You might want to choose a different supplier if being able to reach a customer service representative by phone is crucial to you.
Having trouble keeping track of spending: Borrowers who are convinced they can make their payments on time benefit most from payment plans. You might want to refrain from taking on this kind of debt if you have trouble keeping track of where your money goes. There may be repercussions for your credit if you fall behind on payments since, unlike some BNPL providers, Affirm also sends debtors to collections if you’re more than 120 days past due.
Affirm’s customer service
The company’s sole visible flaw is its customer service. Users said in one of three reviews that Affirm staff did not answer calls, did not reply to correspondence, and even when they did, they were unable to resolve the problem. Customers frequently complain that their app credit limit has been altered for no obvious reason and that they are unable to get it back since the staff is unhelpful. According to the reviews, you can generally expect the call center to respond to you whenever you phone between the hours of 7:00 a.m. and 10:00 p.m., Monday through Sunday.
Is Affirm Safe?
Affirm takes a number of security precautions to safeguard user information. This involves securing data using encryption and running background checks on every employee. There are several concerns while determining whether Affirm is secure financially. Although Affirm positions itself as a debt-reduction alternative, using this payment service still results in a debt obligation. After all, a point-of-sale installment loan is still a loan.
Therefore, even if there is no interest charged, you are still borrowing money that must be repaid. You face the danger of falling behind on payments if you take out an excessive number of Affirm loans. Therefore, it’s crucial to take your financial situation into account when applying for purchase now, pay later finance.
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