The Affirm App allows you to pay for your online purchases over time instead of doing it in one big chunk at the checkout. This eases the burden for larger purchases if you don’t have the extra cash to cover the whole chunk at one time and might be a great choice in a pinch. But while the idea sounds great, should you really use Affirm personal loans for your online purchases?

Before we go any further, please note that I am not a finance genius, and the following is not financial advice. It’s my personal opinion based on my research, experience or both. So, do with it what you will.

What is Affirm?

I was taking a browse around Eloquii the other day eyeing up their pink windowpane suit when I noticed that they allowed shoppers to use the Affirm App to make purchases. So, instead of paying $230 for the adorable suit (plus shipping and duty, because I’m Canadian) I could make 3, 6 or 12 payments of anywhere from $20 to $77 per month. 

Affirm is really a personal loan company that works specifically with small online retailers to allow them to reach a larger audience of shoppers who might not have as much money in their pockets.

Affirm personal loans allow that larger audience who might not be able to drop $1,000 in a day or throw them $230 for a suit to make smaller payments for the same purchase. Essentially opening the online shopping market to people with lower incomes or more financial obligations.

They allow you to purchase and receive something now and pay for (most of it) later. Paying overtime is not a new concept. In fact, I see it a lot of places, especially in the online world where high-ticket items, like a social media course, are offered at a slightly higher price but can be made in payments. 

Affirm personal loans work similarly to that for the consumer. But the difference is that the retailer is paid as soon as the purchase is made, and you payback the third-party, in this case, Affirm, with interest over time.

Affirm personal loans

How does Affirm work?

To use Affirm personal loans, you need to first find a retailer that they’ve partnered with. You can find a list of retailers that have Affirm payment options through the “where to shop” section of their website.

Once you’ve found a retailer, Affirm personal loans are pretty easy to use. There are just three simple steps:

Step 1: Shop

This is the easiest step. To use Affirm personal loans, you need to fill up your cart with the items you want to purchase. Once you’ve filled your cart, select Affirm at the checkout and fill in all of the required information.

Step 2: Choose your plan 

Once you’re ready to pay, the Affirm App will give you time choices for how you pay. You can choose 3, 6 and 12-month payment plans. Note that the longer you have payments, the more interest you pay.

Step 3: Make payments

Your Affirm personal loan payments will be dictated by the plan that you choose. You will most likely make monthly payments on the same day that you made your purchase for all subsequent months. That means if you purchased something on January 1, and signed up for a 3-month plan, you’ll be making payments on February and March 1.

Should you use Affirm personal loans?

Using Affirm personal loans is a very you decision because only you (and maybe your financial advisor) knows what money you have available. My standard advice is don’t use the Affirm Apps for payments because even though you pay less up-front, you’re automatically paying more.

That said, sometimes things are out of our hands and we don’t have much of a choice. Maybe your laptop broke, you’re in the middle of the school semester and you simply can’t go without but you don’t have $1,000 outright for a replacement or anywhere else to get the cash. In that case, Affirm might be a bit of a lifesaver and I’m not about to judge you for that. 

When it comes down to it, I would say, avoid using Affirm personal loans for things you can go without. I don’t need that Eloquii suit right now (or do I?), and I certainly don’t need to pay an extra percent or six for it. If you can’t avoid the situation and you need to make the purchase now, make sure you go through all of your options before making a purchase with Affirm personal loans. If you purchase a $1,000 laptop with 3 percent interest, you’ll end up paying an additional $30 on it. While that doesn’t sound like much, $30 here, $40 there, it really adds up.

When it comes to spending money, just make sure you’re making the best decision for you and your financial future. 

Highlights from the fine print:

  • Using affirm is getting a personal loan. This might not be the right solution for you, so make sure that you’ve done your due diligence before you sign on the dotted line (or click accept).
  • While Affirm says that their soft credit check does not affect your credit score, missed payments will. As with all payments you make, make sure that you make them on time to avoid late fees or other consequences.
  • Making a purchase through Affirm will cost you more money than making the purchase outright because Affirm charges interest.

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Affirm personal loans are now available on a lot of plus-size fashion sites, but should you really use them?

Do you have any experience using Affirm personal loans? Share your thoughts in the comments below!

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