You can also use autopay, which is a good option if you don’t want to go through the hassle of remembering when your payments are due. If you’re late with your payments, Affirm doesn’t charge any late fees so if you’re ever late for a payment, you’ll merely be reminded through emails or text messages.
If you’re delinquent on your payments or default on your loan, Affirm could deny you a loan in the future and that information may be reported to credit bureaus which could result in a decrease to your credit score.
Each loan you take out through Affirm is underwritten individually. You’re able to take out multiple loans through the provider and being approved for one Affirm loan does not guarantee that you’ll be approved for another loan. The maximum value you can take out on one loan is $17,500.
Impact on credit score
People should be aware that Affirm can have a positive or negative effect on their credit score. Whether or not Affirm has an effect on your credit score depends on a variety of factors such as the type of loan and your payment history. When Affirm first determines your eligibility for a loan, they perform only a soft inquiry which has no effect on your credit score.
When it comes to paying off the loan, the provider reports only some loans to Experian. Specifically, it does not report loans with 0% APR and 4 biweekly payments or loans where people were given one option of a three month payment term with 0% APR.
If Affirm does report your payment history to Experian, the entire loan history is reported, regardless of whether it’s positive or negative. When this happens, your payment history, the amount of credit you’ve used, the amount of time you’ve had the credit and late payments are all reported to Experian. By defaulting on your loan or making late payments, you risk decreasing your credit score.
When you return an item, you’ll be returning it through the merchant. If you’re buying an item that you’re not sure you’ll keep, a POS loan probably isn’t your best choice: Affirm only refunds the principal amount on the loan. In other words, any interest that you paid on your purchase won’t be refunded to you.
Since the terms and conditions on Affirm loans vary, whether this POS loan is a good fit for you depends on your financial constraints and the specific terms of the loan. If you don’t read the fine print on your loan when you sign up, you might be surprised by double digit interest rates and negative payment history being reflected on your credit report.
If you’re purchasing an item that incurs a high interest rate and won’t be able to afford to pay it off months in the future, it’s best to skip out on the POS loan and stick with a credit or debit card. You might also be able to secure a lower APR on a credit card and if you can pay off your monthly credit card bill, you can avoid APRs altogether.
There are numerous credit cards that offer an introductory 0% APR period on purchases so you can buy a big-ticket item and spread out the cost over time without pay interest – but you’ll want to pay it off before the introductory period ends so you can avoid paying any https://loansolution.com/installment-loans-co/ interest.
The Chase Freedom Flex? and the Blue Cash Everyday® Card from American Express are cards that offer an introductory 0% APR period on purchases. You’ll also earn cash back on your purchases.