What is Affirm?
Affirm is a financial technology company that offers a buy now, pay later option for consumers making purchases online. It allows customers to spread the cost of their purchase over time, without any hidden fees or compounding interest.
How does Affirm work for consumers?
Sign-up
Consumers can sign up for Affirm at the point of sale on participating ecommerce websites. They are required to provide their name, phone number, email address, date of birth, and the last four digits of their social security number.
Credit check
Affirm performs a soft credit check to determine the consumer’s creditworthiness and to verify their identity. This does not affect the consumer’s credit score.
Loan approval or denial
Once the credit check is completed, Affirm will notify the consumer if they have been approved for a loan. If approved, the consumer can choose from a variety of repayment options.
Loan repayment options
Consumers can choose from several repayment options, including 3, 6, or 12-month plans with interest rates ranging from 0% to 30% APR. The repayment amount is clearly displayed at the time of purchase, so consumers know exactly what they will owe.
Interest rates
Interest rates on Affirm loans vary depending on the consumer’s creditworthiness and the merchant’s agreement with Affirm. However, Affirm does not charge any late fees or compounding interest.
How does Affirm work for merchants?
Eligibility
Merchants must meet certain criteria to offer Affirm as a payment option on their ecommerce websites. They must have a minimum annual revenue and meet Affirm’s quality standards.
Application approval or denial
Once a merchant applies to offer Affirm as a payment option, Affirm will review their application and determine if they are approved to offer the service to their customers.
Payment terms and fees
Merchants pay a fee to Affirm for each transaction, but there are no other fees or hidden costs associated with offering Affirm as a payment option.
Does Affirm affect credit scores?
Affirm performs a soft credit check when a consumer applies for a loan, which does not affect their credit score. However, if a consumer fails to repay their loan, it could negatively impact their credit score.
How do returns work with Affirm?
When a consumer returns an item they purchased using Affirm, Affirm will issue a refund to the consumer for the amount they have already paid, and adjust the remaining loan balance accordingly.
How does Affirm work FAQ
What are the alternatives to Affirm?
There are several alternative buy now, pay later options available to consumers, including Afterpay, Klarna, and PayPal Credit.
Is Affirm safe?
Affirm is a secure and trusted payment option for ecommerce purchases. They use encryption and fraud detection technology to protect consumers’ personal and financial information.
Does Affirm affect your credit?
Applying for an Affirm loan may result in a soft credit check, but making timely repayments can help build positive credit history. However, failing to repay an Affirm loan could negatively impact a consumer’s credit score.
By offering Affirm as a payment option, ecommerce merchants can attract more customers and increase sales by providing a flexible and transparent financing option. Consumers benefit from the ability to make purchases without immediate payment and the option to spread the cost over time without hidden fees or compounding interest. Overall, Affirm’s buy now, pay later option has the potential to significantly boost ecommerce sales and improve the shopping experience for both merchants and consumers.