In a Nutshell“Buy-now, pay-later” companies like Affirm may be able to help you finance major retail purchases. You usually can spread out the cost over weeks or even months, though you’ll want to check on fees and interest charges. If you’re looking for an alternative to Affirm, we’ve broken down several options to consider.
Affirm is a buy-now, pay-later app that allows you to spread out the cost of a purchase over time. You can split your purchase into installment payments and select a payment schedule that works for you and your budget.
While the company works with well-known brands like Adidas, Peloton, Vrbo and Walmart.com, it might not be a good fit for all shoppers. If you’re looking for lower-interest options or different payment terms, consider these four buy-now, pay-later companies like Affirm before you finance your next purchase.
- Best for ongoing spending: Afterpay
- Best for longer payment terms: Klarna
- Best for no-interest financing: Sezzle
- Best for credit card users: SplitIt
- What you should know about companies like Affirm
- How we picked these companies
Best for ongoing spending: Afterpay
Why Afterpay stands out: Afterpay is a well-known financing option that gives you an estimated spending limit. You can use the spending limit to finance multiple purchases rather than applying for a new loan every time at checkout. Just keep in mind that individual retailers may have purchase limits as well.
- New customers — While established customers can use Afterpay to finance more than one purchase at a time, new customers are limited to just one purchase at first. Over time, your spending limit may increase, and you may get the option to have multiple orders open at once.
- Interest — Orders financed through Afterpay are repaid in four interest-free installments.
- Late fees — If you’re late with a payment, Afterpay will charge you up to $8. But the late fees within a single order won’t exceed 25% of the order value.
- Accepted in-store at some retailers — Afterpay can be used to finance purchases online and in store at some partner merchants. In-store partners include Dick’s Sporting Goods, DSW, Finish Line and Mac Cosmetics.
Best for longer payment terms: Klarna
Why Klarna stands out: While Affirm’s payment terms are typically 12 months or less, Klarna offers more flexibility, giving you up to 36 months to pay off your purchase.
- Payment options — Klarna has multiple payment options to consider.
- Interest-free payments: Customers can split the cost of their purchase into four payments paid every two weeks with no interest.
- Pay in 30 days: With this option, customers can complete their purchase and repay the amount over 30 days with no interest charges.
- Longer-term financing: If you need more time to pay for a purchase, Klarna partners with WebBank to offer longer-term loans between six and 36 months.
- APR — If you opt for the longer-term financing option, you’ll be charged interest. The APR for standard purchases is in the double digits.
- Fees — In addition to interest charges, Klarna also charges late payment and returned payment fees.
- Accepted at some brick-and-mortar stores — Klarna can be used to finance in-store purchases at certain partner retailers.
Best for no-interest financing: Sezzle
Why Sezzle stands out: Unlike Affirm, where APRs can be in the double digits, Sezzle is a buy-now, pay-later app that charges no interest (though you may have to pay fees). You can use Sezzle online at more than 29,000 partner merchants.
- Credit check — When you apply for financing through Sezzle, the company will perform a soft credit inquiry that doesn’t affect your credit scores.
- Fees — If you’re late making a payment or reschedule payments for a second or third time, Sezzle will charge you fees.
- Payment term — With Sezzle, your entire order is split into four interest-free payments made over six weeks.
Best for credit card users: SplitIt
Why SplitIt stands out: Most financing apps function like loans, but SplitIt uses your existing credit card to divide the cost into interest-free monthly payments. It doesn’t charge any interest or late fees. But if you don’t make credit card payments on time and in full each month, you may still accrue interest for your purchase.
- No credit checks or application required — Because SplitIt uses your existing credit card, there’s no application process or credit check required to use it for your purchases. You just have to select SplitIt at checkout.
- Credit card types — SplitIt works with Visa and Mastercard credit cards. Other card types, such as Discover and American Express, aren’t eligible.
- Credit card rewards — If you use SplitIt to finance a purchase, you can still earn cash back rewards, points or miles since your credit card is used for the transaction.
What you should know about companies like Affirm
Whether you’re planning a dream vacation, need a new computer for school or want to get a new mattress to relieve back pain, you may not have enough money to cover the purchase outright. Instead of raiding your savings account or putting off the purchase, buy-now, pay-later companies like Affirm allow you to spread out the cost of your purchase and can sometimes be less expensive than credit cards.
But there are some drawbacks to these apps to keep in mind.
- High interest rates — While not all apps charge interest or fees, many of them do. Particularly if you choose a longer repayment term — such as three to 36 months — you may be charged a double-digit APR. Interest charges can make your original order much more expensive.
- Extra fees — Be sure to read the companies’ disclosures and fee charts and make all of your required payments on time. Some companies charge late fees, returned payment fees, rescheduling fees or convenience fees. A 2021 Credit Karma survey found that of people who use buy-now, pay-later apps, 38% have fallen behind on at least one payment — and most of those people have experienced a credit score drop.
- Effect on spending habits — Buy-now, pay-later apps are convenient, but if you aren’t careful, you could overspend on nonessentials. Before using companies like Affirm to finance your next purchase, make sure you budget for the item and can afford your payments.
How we picked these companies
To identify the best companies like Affirm, we researched 10 buy-now, pay-later apps. Each company was evaluated based on its ease of use, available repayment options, APR and fees. We also looked at the companies’ retailer networks and whether they required credit checks.