Affirm vs. Afterpay: which should you choose?
|To affirm||After payment|
|Amount due on purchase||As low as $ 0||25%|
|Repayment Terms||Varies according to the type of loan||Pay 25% every 2 weeks|
|Interest||0% or 10% to 30%||0%|
|Credit check required||Varies according to the type of loan||Nothing|
|Late fee||Nothing||$ 10, plus an additional $ 7 if payment is unpaid 7 days after the due date|
|Number of merchants||11,500||85,000|
|Popular brands available||Platoon, Target, Best Buy, Walmart.com||Bath & Beyond bed, Old Navy, Forever 21, Pandora, UGG|
|Other financing products||Virtual card numbers
Affirm savings account
Confirm credit card
Affirm or Afterpay: conditions
Buy now, pay later, financing is available from Affirm and Afterpay. Affirm offers a variety of terms and repayment options, while Afterpay focuses solely on “pay-in-four” consumer loans, where the purchase price is split into four equal payments.
With Affirm, you will have the choice between several payment terms at checkout. This gives you the flexibility to select the payment amount, interest rate, and term that best suits your budget. Some of these payment options are quarterly payment which is common with BNPL applications, while others are longer term up to 36 months. Although credit limits vary by customer, the maximum loan amount is $ 17,500. Depending on the retailer you shop with, you may need to pay a deposit.
Afterpay divides customer purchases into four smaller payments with its four-way payment financing. The company does not have a minimum purchase requirement, but some retailers may require you to spend a certain amount before this financing option becomes available. Your spending limit is determined by your personal profile, but this does not guarantee that your transaction will be approved at checkout. Like many pay-in-four programs, each transaction is taken out individually for an instant credit decision.
Affirm vs. Afterpay: credit requirements
Affirm performs a gentle credit check when you create an account to pre-qualify for future purchases. This indirect request does not affect your credit score and will not appear on your credit report. However, when you make a purchase, your credit score may be affected if Affirm performs a serious credit investigation. Additionally, your payment history and credit usage may also be reported to credit bureaus.
Afterpay does not check a customer’s credit to open an account or at the time of purchase. If you are late with your payment, Afterpay also does not report overdue or missed payments to the credit bureaus. This makes Afterpay an attractive financing option for people with credit problems or who do not have enough credit history to be approved by other lenders.
Affirm vs Afterpay: interest and fees
The interest rates on Affirm loans vary depending on the merchant you are buying from. Some merchants offer a 0% interest promotion, while others may charge a higher rate. All financing information will be presented to you during your transaction so that you can make a decision before finalizing your purchase. You will never pay more than what you agree to advance.
If you are going to be late with a payment, you can log into your account online or through the Affirm app to reschedule your payment. Although Affirm does not charge a late fee, if you make a partial payment or have a late payment, it could affect your credit score or your ability to get approved for another loan.
Afterpay does not charge interest or fees as long as you make all of your loan payments in quarters. You will be charged a $ 10 fee if your payment is late. If your account is not updated within seven days, you will be charged an additional fee of $ 7.
Affirm or Afterpay: mobile application
Affirm and Afterpay offer mobile apps for Apple and Android so customers can access their accounts, browse and buy at participating merchants, and pay their bills anywhere, anytime. Each app offers a personalized experience based on a user’s preferred merchants, spending limit, and purchase history.
The Affirm mobile application (Apple, Android) gives customers the opportunity to finance their purchases at more than 11,500 merchants. Customers can shop online or in person with the mobile app at participating stores. The app offers exclusive offers from its merchants and special finance rates as low as 0%. Customers can also open a high yield savings account through the app, which has no monthly fees or minimum balance requirement.
Customers can browse and buy from over 85,000 retailers with the Afterpay mobile app (Apple, Android). The app also allows you to make in-person purchases at participating retailers. In the app, you can view your purchase history, payment schedule, and the shipping status of your purchases. Your payment method can be changed through the app and you can also prepay future payments.
Affirm vs. Afterpay: other products
In addition to buying now, paying financing later, many of these companies offer additional products to meet the needs of their customers. These additional products provide additional sources of income and help them become the finance option of choice when it’s time to make a purchase.
Affirm offers a variety of payment options beyond the typical four-way repayment loan services. When paying, customers have several financing options so they can choose the amount and payment term that works best for them.
Customers can also earn a higher interest rate on their money with the Affirm savings account. This account is FDIC insured up to $ 250,000 and has no monthly fees or minimum balance requirements. You can open an account with just one penny. Although the interest rate is subject to change, the current rate offered is 0.65%, which Affirm says is 13 times the national average.
Affirm will soon be issuing a credit card and you will be able to put yourself on the waiting list to be notified when it becomes available. The Affirm credit card will provide four-way financing for purchases over $ 100 at any qualifying retailer. This means you can split your purchases into four easy payments without incurring any interest or fees. There will be no annual fee, no late fee and no prepayment penalty when using the card.
Afterpay does not currently offer any additional financing options beyond its quarterly loans. Instead, he is focusing on these short term, interest free loans as he continues to grow his network of traders and expand globally.
Frequently Asked Questions (FAQ)
How do Affirm and Afterpay work?
Buy now, pay later, apps work by dividing your purchases into smaller, more affordable payments. Many of these loans do not charge interest or fees as long as the customer makes all payments on time. Apps primarily make money by charging retailer fees, late fees, and (if applicable) interest on loans. With quarterly amortizing loans, the customer will immediately pay 25% of the purchase price and then an additional 25% every two weeks until the loan is paid off in full.
Do Affirm and Afterpay require a credit check?
Affirm requires a gentle credit check when opening an account, which does not affect your credit score. When you are ready to make a purchase, Affirm may require a serious credit investigation to verify your score and suggest financing options based on your credit profile.
No credit check is required with Afterpay. Afterpay doesn’t even ask for your social security number when creating their account. Instead, your spending limits will increase based on your payments on time and responsible use of its platform.
Can you create credit with Affirm or Afterpay?
When you borrow with Affirm, your positive payment history and credit usage may be reported to the credit bureaus. It can help you build credit with the credit bureaus as long as you make all of your payments on time and aren’t maximizing your credit.
Afterpay will not help you build your credit history because it does not report its loans to the credit bureaus. While this is helpful in gaining approval, not having it reported on your positive payment history won’t help your credit either.
To determine which app to buy now, paying later is the best option for consumers, we looked at numerous data points for both Affirm and Afterpay. We analyzed their fees, interest rates, financing options, participating retailers, and other features to choose our recommended lender. Our choice for the best BNPL app between Affirm and Afterpay is Affirm because it offers more financing options, longer terms on larger purchases, and the ability to create credit with your on-time payments. Afterpay is a good choice for payback loans for consumers who have bad credit or are just starting out with their credit profile.