Confirm Personal Loans Review: Pros And Cons

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During the pandemic, online shopping became a necessity for most of the people. Instead of searching the aisles of a grocery store or strolling the mall, most people opted for the easy and safe way to buy items online and have them delivered to their homes.

“Buy now, pay later” made it even easier for consumers to buy items online. Now when consumers buy a large ticket like a Peloton bike or make smaller purchases like used ThredUp clothing, they no longer have to make a one-off payment.

People can spread their expenses over a fixed period of time and opt for loans with 0% interest and no late payment interest on point-of-sale loans. In fact, a recent study by Morning Consult found that 17% of US adults took out a “buy now, pay later” loan in June.

Affirm is one such popular “buy now, pay later” option. Affirm offers customers the ability to pay off their loans in a typical time frame of three months to a year and is integrated with the websites of many retailers such as Target, Walmart, Peloton, Neiman Marcus and Nike.

Below, Select looks at some of the pros and cons of using this POS loan provider.

How does affirmation work?

APR and payment method

Affirm loan interest rates can range from 0% to 30%, which is higher than the highest APR on most credit cards. According to the company, 43% of the loans taken out at Affirm have an APR of 0%.

When Affirm determines your eligibility for a loan and your interest rate, the company will verify your personal information, your creditworthiness, when you applied for the loan, your payment history with Affirm (if any) and how long you have had a credit account.

Another important factor that Affirm takes into account when setting your interest rate is the relevant trader’s APR. Some merchants offer 0% interest for a limited time and others offer 0% APR to qualified customers.

When you pay interest on your affirm loan, you are paying simple interest, not compound interest (or interest on your interest). In other words, your monthly payments are fixed so you don’t have to worry about your installment payments increasing over time.

You can also choose the term of your amortization loan, between 1 month for small purchases and 48 months for more expensive purchases. Your installment payments are usually due biweekly or monthly.

After submitting some information about yourself to Affirm, a loan will be approved or denied almost instantly. Affirm will not change the terms that you agree to. You should read the fine print carefully to find out if you can afford your installment payments over the life of the loan. Sometimes you will be approved for a loan, but you will also have to pay a down payment for it.

If you have declined a loan, you will receive an email explaining the reason.

With Affirm, you can pay with either your debit card, bank account, or check. You can also use Autopay, which is a great option if you don’t want to go to the hassle of remembering when your payments are due. If you are late with your payments, Affirm will not charge any late fees. So if you are ever late with a payment, all you will be able to do is send an email or SMS to remind you.

If you are late with your payments or default on your credit, Affirm could deny you a loan in the future and this information may be reported to credit bureaus which could result in a decrease in your credit score.

If you are unsure whether to apply for a loan, Affirm also offers consumers the option to “pre-qualify” for a loan, which allows you to see the value of the loan for which you would qualify. You can pre-qualify for a loan in two ways: either through the app or the merchant’s website. The prequalification does not affect your creditworthiness.

Loan amount

Each loan you take out through Affirm is drawn individually. You can get multiple loans through the provider, and approval for one affirm loan does not guarantee that you will be approved for another loan. The maximum amount you can borrow on a loan is $ 17,500.

Effects on creditworthiness

People should be aware that Affirm can have a positive or negative impact on their creditworthiness. Whether or not affirm affects your credit score depends on a variety of factors such as the type of loan and your payment history. The first time Affirm determines your eligibility for a loan, it just does a gentle query that doesn’t affect your creditworthiness.

When it comes to repaying the loan, the provider only reports some loans to Experian. Specifically, no loans with 0% APR and 4 biweekly payments or loans where people have been given an option to pay 3 months at 0% APR are not reported.

When Affirm reports your payment history to Experian, it will report all credit history regardless of whether it is positive or negative. In this case, your payment history, the amount of credit you used, the duration of the credit, and late payments will be reported to Experian. If you default on your credit or make late payments, you risk lowering your credit score.

Returns

When you return an item, return it through the retailer. If you’re buying an item that you’re not sure you’ll keep, a POS loan may not be your best bet: Affirm will only refund the loan amount. In other words, any interest paid on your purchase will not be refunded to you.

Bottom line

Since the terms of Affirm Loans vary, it depends on your financial constraints and the specific terms of the loan whether this POS loan is right for you. If you didn’t read the fine print of your credit when you sign up, you might be surprised to find double-digit interest rates and negative payment history reflected on your credit report.

If you’re buying an item that has a high interest rate and can’t afford to pay it off in the next few months, it’s best to forego POS credit and stick with a credit or debit card. You may also be able to secure a lower APR on a credit card, and if you can settle your monthly credit card bill, you can avoid APR altogether.

There are numerous credit cards that offer a 0% APR on purchases so you can buy a large item and spread the cost over time without paying interest – but you want to pay it off before the introductory period ends Avoid of interest.

American Express’ Chase Freedom Flex℠ and Blue Cash Everyday® Card are cards that offer a 0% APR introductory period on purchases. You also get cashback for your purchases.

However, if you are able to secure 0% APR on your loan, Affirm might be a good choice as it can avoid paying upfront the entire cost of an item – this could be especially useful for large items like furniture or exercise equipment. An affirm loan might also be a better choice than a credit card if you don’t believe you will be able to pay your monthly credit card bill on time and in full.

Chase Freedom Flex℠

  • reward

    Earn 5% cashback on grocery purchases (excluding Target® or Walmart® purchases) for up to $ 12,000 spent in the first year, 5% cashback for up to $ 1,500 on combined purchases in bonus categories each quarter that You activate (then 1%), 5% cashback for trips booked through Chase Ultimate Rewards®, 3% cashback for restaurants and drugstores, 1% cashback for all other purchases

  • Welcome bonus

    $ 200 cashback after spending $ 500 on purchases in the first three months of opening your account

  • Annual fee

  • Introduction of APR

    0% for the first 15 months on purchases

  • Regular annual interest

    14.99% to 23.74% variable

  • Transfer fee for the credit

    Either $ 5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fee

  • Credit needed

Blue Cash Everyday® Card from American Express

On the safe side of American Express

  • reward

    3% cashback at US supermarkets (up to $ 6,000 per year on purchases, then 1%), 2% cashback at US gas stations and select US department stores, 1% cashback on other purchases. Cashback is received in the form of Reward Dollars, which can easily be redeemed against bank statements.

  • Welcome bonus

    Get 20% back on purchases on Amazon.com within the first six months of membership, up to $ 150 back. You will also receive $ 100 in credit after spending $ 2,000 on purchases with your new card within the first six months of opening your account

  • Annual fee

  • Introduction of APR

    0% for the first 15 months on purchases, N / A for credit transfers

  • Regular annual interest

    13.99% to 23.99% variable

  • Transfer fee for the credit

  • Foreign transaction fee

  • Credit needed

Note to editors: Opinions, analysis, reviews or recommendations expressed in this article are solely those of the Select editors and have not been reviewed, approved or otherwise endorsed by third parties.

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