How Affirm Works

Affirm is a provider of Buy Now Pay Later (BNPL) and forms of Point-of-Sale (POS) financing that allows you to split a purchase into installments. While some providers, like Afterpay, focus exclusively on BNPL financing, Affirm offers a broader array of point-of-sale loans, ranging from bi-weekly installments in its "Split Pay" product to monthly installments that are paid over 12 or 24 months. You can also open a savings account inside its app.

PRE-PURCHASE

Like most BNPL apps, you're able to view online retailers where you can pay with Affirm directly at checkout or with their virtual credit card. For each retailer you come across, Affirm will tell you exactly how much you're pre-qualified to spend, along with any active deals at the retailer. Unlike the virtual cards of other BNPL providers, Affirm's cannot be used with mobile wallets for in-store purchases (however, it's launching a plastic debit card later this year to meet that IRL need).

You can add brands of interest to your shopping list, which lives at the bottom of the main "Shop" tab and I find difficult to access. While the app allows you to search for specific products, it only returns a list of retailers where the product might be found, rather than a direct link to where you can buy the product, as Klarna app does.

PURCHASE

When time comes to pay, you'll simply sign into your Affirm account at checkout or, in cases of paying with the virtual card, tap the card icon at the bottom of the screen. If applying for a monthly installment loan, rather than BNPL, you'll be asked for the last four digits of your social security number, in addition to standard personal information. Unlike Klarna and Afterpay that charge you the first installment at the time of purchase, the first payment with Affirm isn't due until two weeks later.


One other unique aspect of Affirm is that it doesn't require you to add a form of repayment (either a bank account or debit card) when applying for your loan. For this reason, you'll want to make a mental reminder to add a payment method inside the app after your first order and avoid the scenario of being late on your first installment.

POST-PURCHASE

Speaking of being late on a payment: Affirm won't penalize you with the $7 to $10 fees that most other providers do. However, this comes with strings attached. If late on a payment, Affirm will continue to pummel you with text and e-mail reminders and, more importantly, will take the delinquency into account when deciding whether to lend to you again in the future.


Affirm is like other BNPL apps in that you can track remaining payments on an order and repay the entire loan balance at any given time. But one of my favorite aspects of the Affirm app is the presence of detailed loan terms beside each of your purchases in the "Manage" tab that provide me with an extra layer of transparency around the borrowing arrangement.



NOTE: This post was based on Version 3.121.0 of the Affirm iOS mobile app