Afterpay at a glance:
- Loan amounts: Varies by retailer and individual
- Loan terms: 6 weeks to 24 months
- Speed of funding: Within minutes
- Fees: Up to $8 in late fees
- Credit requirements: Not disclosed
Afterpay is a buy-now, pay-later (BNPL) platform that can make larger purchases more manageable by splitting up the cost over several weeks or months. You can use Afterpay at major retailers, and with travel companies including Expedia and Nordstrom. Its Pay in 4 option, which requires installment payments over six weeks, is interest-free, but its Pay Monthly option charges interest.
Pros
- Interest-free financing options available
- Qualify with a soft credit check
- Special promotional discounts may be available
Cons
- Longer terms are limited to select retailers
- Late fees can be costly
- Residents of certain states are not eligible for monthly payment plans
What makes Afterpay stand out?
Afterpay stands out among BNPL options for its easy application process and interest-free financing.
Here are some key features to know about Afterpay:
There are two Afterpay BNPL options
When you don’t want to pay a large sum upfront, Afterpay has two potential options:
- Pay in 4: When you need just a few weeks to pay off a purchase, Afterpay’s Pay in 4 option might work. You make four payments over six weeks, and as long as you make your payments on time, there are no interest or finance charges.
- Pay over time: At some select retailers, you can split up your purchase into monthly installments, and repay the financed amount over three to 24 months. However, the Pay Monthly option may require a down payment, and you may have to pay interest.
| Afterpay payment plan | Interest | Repayment term |
|---|---|---|
| Pay in 4 | Interest-free | 6 weeks |
| Pay Monthly* | 0% to 35.99% | 3 to 24 months |
| *Pay Monthly isn’t available in Hawaii, Nevada, New Mexico, or West Virginia | ||
Afterpay doesn’t report to the credit bureaus
Although Afterpay may perform a soft credit check when you sign up for the app, applying for financing doesn’t affect your credit. Afterpay doesn’t report its accounts or payment activity to the major credit bureaus, so your payment plan won’t impact your credit.
Afterpay works with a broad range of retailers
You can use Afterpay at a broad range of merchants and retailers, including electronics companies, travel companies and clothing stores. You can use Afterpay for interest-free financing for everything from hotel stays to headphones.
Afterpay’s Pay Monthly feature is only available for certain retailers, but according to the company, it’s expanding access.
What are the downsidesof Afterpay?
Although Afterpay can be useful for some purchases, there are potential downsides to keep in mind:
Late fees can be pricey
If you miss a payment on an Afterpay payment plan, the company will charge you a late fee. The fee can be up to 8%, and the aggregate sum of your late fees with a particular order can be as much as 25% of your order total, adding to your overall cost.
APRs can be high
Interest-free financing is available on Afteropay’s Pay in 4 option, but if you qualify for the Pay Monthly payment plan, you may have to pay interest. Annual percentage rates (APRs) vary based on the merchant and your credit, but can be as high as 35.99%.
For example, say you book a $1,000 hotel stay with After, and repay it in 12 monthly installments at 35% APR. You’d end up paying a total of $1,199.56, so you’d pay nearly $200 more thanks to interest. You can use the simple loan calculator to estimate your monthly payments and overall repayment cost.
BNPLs generally can lead to more debt
BNPLs like Afterpay can tempt users into taking on more debt. A 2025 study released by the Consumer Financial Protection Bureau (CFPB) reported that the average annual amount financed per user on BNPL platforms was $848, a 14% increase from the prior year. And companies charged $135.9 million in late fees.
Before financing a purchase with Afterpay or other BNPL services, review the terms of the BNPL agreement and make sure you can comfortably afford the payments.
How to qualify for an Afterpay payment plan
To qualify for Afterpay financing, you must meet the following requirements:
- You must be at least 18
- You must be a resident of the U.S.
- You must have a verifiable email address and mobile number
- You must have a valid delivery address
- You must have a U.S.-issued debit or credit card
- You must pass identity verification
To finance a purchase with Afterpay, follow these steps:
- Download the app: The app is available for iOS and Android devices. It will prompt you for your email address, phone number, and mailing address.
- Shop online or in-store: You can choose Afterpay as a payment method at checkout online, or you can use the app to make in-store purchases.
- Choose a payment plan: Based on the merchant and your eligibility, Afterpay may show you different payment options. Review the options and select the payment plan that works for you.
- Set up payments: Afterpay uses automatic payments, so you have to sync a debit or credit card to your account. Afterpay will deduct the payments on the scheduled due date from your agreement.
Not sure if Afterpay is right for you? Consider these alternatives.
- Affirm: For larger purchases, such as furniture or a new laptop, Affirm offers repayment terms as long as 48 months, which may give you a lower monthly payment.
- Klarna: Klarna is available for a wider range of retailers, and its longer terms are available in all 50 states.
FAQs about Afterpay
No, Afterpay doesn’t report the major credit bureaus, so an Afterpay payment plan can’;t impact your credit. However, if you default on a plan, Afterpay may eventually send your account to collections, which can show up as a negative on your reports.
Yes, Afterpay runs soft credit checks when you apply, but soft credit checks don’t affect your credit scores.
If you miss an Afterpay payment, the company will charge you a late fee. The fee can be up to $8.
No, using Afterpay will not help build your credit. Afterpay doesn’t report the credit bureaus, so it doesn’t affect your credit history. If you default and the account goes to collections, that could impact your credit negatively.
Afterpay has two payment options. Its short-term financing “Pay in 4” plan is a buy-now, pay-later plan — sometimes known as a point-of-sale plan. Its Pay Monthly plan is a loan repaid in monthly installments.
Some BNPL companies, such as Affirm and Klarna, report payment plans and payments to the credit bureaus, but that’s not the case for every platform. Depending on which service you use, missing a payment could impact your credit.
Our methodology: How Credit Karma rates personal loans
Credit Karma’s editors evaluate personal loans by reviewing key features and how they compare to other popular lenders. Those features fall into the following three categories:
- Affordability — We start by checking if a lender’s rates are competitive: Are they higher than average, or are they lower than many competitors? Then, we analyze if fees — particularly origination fees — may make your loan more costly. Last, we’ll check if the lender offers rate discounts for things like automatic payments that may reduce your rate.
- Customer-friendly features — Taking out a personal loan is a big financial commitment, so we prioritize lenders that make things easier for you. For instance, does a lender offer a wide range of loan amounts for people with different borrowing needs? Does it offer at least several loan terms to give you more flexibility with your monthly payment? And, crucially, can it fund your loan quickly? A lender will also get bonus points for offering direct payments for debt consolidation or other customer-friendly features.
- Transparency — We believe personal loan terms should be easy to find and decipher. Prequalification, which lets you check what rate you may qualify for without a hard credit inquiry, is particularly important. We also check to see if a lender has been recently penalized by regulators.
*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.