How does Affirm Canada compare with other BNPL services?

By   |   Verified by Nikita Sheth   |   Updated 15th April 2021

Finty review Affirm
  • Affirm offers simple financing terms with no hidden fees and no late penalties.
  • Available at a large number of stores, including Walmart, Dyson, Peloton, Bonobos, and many more.
  • Is this the buy now pay later service that best suits you?

Founded by Max Levchin, one of the co-founders of PayPal, Affirm is a buy now pay later service offering installment loans at thousands of stores across Canada and the United States.

If you would like an alternative to your credit card, Affirm might be the answer. In this review we look at how their installment loans work — because not all buy now pay later services work the same way — as well as fees, how it impacts your credit score, where you can use it, alternatives, and more.

What is Affirm?

Affirm is the largest international point-of-sale lender offering buy-now-pay-later loans on various purchases with qualifying retail partners.

There are no late fees or penalties charged to your account if you miss a payment, and you get lending facilities up to $17,500.

With Affirm, you can afford to make those big-ticket purchases without putting them on your credit card.

How does Affirm work?

Affirm is the global-leader in buy-now-pay-later loans. You'll find the logo displayed at the point-of-sale at online and offline retailers.

When checking out with your purchase, you'll have the option to apply for an Affirm loan with qualifying retailers. Provided you meet its lending criteria, the company issues an instant approval, and you can decide whether you want to take the loan.

When completing your purchase, you typically make a down payment on the loan amount due at point-of-sale. This is basically your first payment toward your outstanding loan balance.

Affirm offers you three options for repayment of the balance, with three, six, and twelve-month facilities available.

How much does it cost?

Affirm makes money by charging APR on your loan. While there are plenty of retail partners that offer you 0% APR on your purchases, some charge APR on your outstanding balance.

APR can range from 0% to 30%, depending on your loan amount, previous loan history with Affirm, and the retailer processing the transaction.

However, in most cases, Affirm offers you APR averaging between 10% to 30% on the loan amount.

What stores accept Affirm?

Affirm works with more than 7,500 retail partners in the US and Canada, with more international retailers added to the list every year.

You can get Affirm loans for online purchases with retailers like Amazon and with offline brick-and-mortar retailers displaying the Affirm logo at point-of-sale. Some of the leading global brands partnering with Affirm include Adidas, Gucci, Motorola, and Walmart.

Does Affirm affect your credit score?

When signing up for a loan, Affirm does a "soft" credit check, which won't affect your credit score. Affirm uses it solely to verify your identity.

This soft credit check is very different from the "hard" credit check completed by banks and other financial lenders when issuing loans. The main cause of denied loans through Affirm is the inability to confirm your identity.

However, Affirm can damage your credit score if you don't pay on time or miss a payment. The company reports your payment activity to the credit bureaus.

Therefore, if you pay on time, it can benefit your credit score, but if you are unable to meet your obligations and pay late or miss your loan payments, you can severely damage your credit score.

Pros and cons

Pros

  • Canada’s largest buy-now-pay-later firm for point-of-sale loans for your purchases.
  • Affirm purchased the Canadian lender, PayBright, expanding its network to 7,500-retailers internationally.
  • Maximum loan limit of $17,500.
  • Consumers have the option to take multiple loans, provided they meet the lending criteria.
  • No late payment penalty fees.
  • 0% APR available from select retailers.
  • No service fees.
  • Fixed payments available on loans.
  • Soft credit check won't impact your credit score.

Cons

  • May require a down payment at point-of-sale
  • APR can reach as high as 30%
  • Late payments or non-payments will negatively affect your credit score

Alternatives

  • Sezzle: A US-based company with headquarters in Minneapolis. Sezzle operates in the US and Canada, offering consumers point-of-sale loans to purchase products and services with authorized retailers. You get interest-free installments and a maximum loan limit of $2,500.
  • PayBright: Having been acquired by Affirm in 2021, PayBright's buy now pay later service is now available at more than 7,500 Canadian, US, and international partners.
  • Afterpay: Australian-owned buy now pay later pioneer with operations in Australia, Canada, and the United States. With Afterpay, you can buy now and pay for it later at participating stores with loans up to $1,500. Afterpay issues you with as many loans as you want, but you can't have an outstanding limit of more than $2,000 on your account.

FAQs

What credit limit is offered by Affirm?

Affirm offers qualifying candidates up to $17,500 in loan value, depending on your credit score and payment history with Affirm. Therefore, Affirm makes it possible to purchase big-ticket items without the need to put them on your credit card or take out a personal loan from the bank.

What happens if you don't pay Affirm?

Affirm doesn't charge late fees. However, if you think you're going to miss your payment date, it's critical you change the date in your account. Late payments or non-payments will damage your credit score, affecting existing credit facilities with lenders and any future credit applications.

Can you have more than one Affirm account in the same name?

Affirm Canada doesn't place a limit on how many loans you can take at any one time. However, just because you have one loan with Affirm doesn't guarantee that they will issue you with a second or third loan.

Can you use Affirm to pay bills?

No, Affirm won't issue loans to pay your water or light bill or other household expenses, like credit card or car payments. Affirm only offers loans for your retail purchases with approved merchants in the Affirm Canada network.

How old do you need to be to sign up for Affirm?

Affirm requires all its clients to be of legal age for signing financial contracts. Therefore, you'll need to be at least 18 years old in order to qualify for and open an Affirm account.