Buy now, pay later (BNPL) services like Acima and Affirm are changing the way people shop and pay. These platforms allow you to split purchases into multiple interest-free payments over time. This can make big ticket items more affordable.
BNPL services are exploding in popularity, especially among younger buyers. In Q2 2021, BNPL transaction volume grew over 200% year-over-year.
But how exactly do Acima and Affirm work? And which one is better for your needs? In this comprehensive guide, we’ll compare the key features, pros, cons, and use cases for Acima and Affirm.
A Brief Comparison Table
| Feature | Acima | Affirm |
| Purchase Amounts | $500 – $2,500 | $50 – $17,000 |
| Loan Terms | 6 – 12 months | 3 – 36 months |
| APR | 0% | 0% – 30% |
| Credit Check | Soft check only | Soft + hard check |
| Minimum Credit Score | 525 | 640 |
| Late Fees | None | Up to $15 |
| Approval Time | 60 seconds | Up to 15 minutes |
| Accepted Retailers | Select partner retailers | Wide network of retailers |
| Can be Used Outside Retail Network | No | Yes |
How Does Acima Work?
Acima is a lease-to-own BNPL provider founded in 2017. With Acima, you can split any purchase between $500-$2,500 into 6-12 monthly payments.
Here’s an overview of how Acima works:
- Acima is offered at thousands of retail partners online and in physical stores. If a retailer offers Acima, you’ll see it as a payment option at checkout.
- To qualify, you’ll need a minimum credit score of 525. Acima will run a soft credit check that doesn’t impact your score.
- If approved, you’ll pay the first month’s payment at checkout. The remaining balance is split into fixed monthly payments over 6-12 months.
- Acima charges no interest and no late fees. However, missing multiple payments can impact your credit score.
- You own the item once all payments are made. You can pay it off early with no penalties.
- If you return the item, any remaining lease payments are voided. You only pay for the time you had the item.
Acima approvals are instant with limited eligibility requirements. This makes it easy for those with lower credit to qualify.
How Does Affirm Work?
Affirm, founded in 2012, offers flexible 0-30% APR installment loans at thousands of retailers.
Here are the key details about how Affirm works:
- Affirm offers 3-36 month loans from $50-$17,000. The loan amount, terms, and APR you’re offered depend on your creditworthiness.
- Soft credit checks are initially run that don’t affect your credit score. Once you accept loan terms, Affirm runs a hard inquiry.
- Affirm offers 0% APR on shorter 3-6 month loans. Longer loans of 12-36 months have interest ranging from 10-30% APR.
- You’ll pay your first installment at checkout, then fixed monthly payments on the remaining balance.
- Missed or late payments can incur fees and negatively impact your credit. Early repayment isn’t penalized.
- Affirm approvals are not instant. It can take up to 15 minutes to receive a decision.
Affirm offers flexible loan options for those with fair to excellent credit. Approval is not guaranteed based on credit risk.
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Key Feature Comparison Between Acima And Affirm
Here’s how the key features of Acima and Affirm compare:
Purchase Amounts
- Acima: $500-$2,500
- Affirm: $50-$17,000
Loan Terms
- Acima: 6-12 months
- Affirm: 3-36 months
APR
- Acima: 0%, no interest
- Affirm: 0-30% APR
Credit Checks
- Acima: Soft check only
- Affirm: Soft + hard check
Credit Score Requirements
- Acima: Minimum 525
- Affirm: Minimum 640
Late Fees
- Acima: None
- Affirm: Up to $15
Additional Perks
- Acima: None
- Affirm: Can be used for purchases outside retailer network
Pros And Cons Of Acima
Pros
- Simple to qualify with no credit check impact
- Quick 60 second approvals
- Fixed payments that fit your budget
- No interest or hidden fees
Cons
- Limited to specific purchase amounts and terms
- Missed payments hurt credit score
- Offered at fewer retailers than Affirm
- No additional perks or rewards
Best For
Acima is ideal for lower credit borrowers who want predictable payments and zero interest on mid-range purchases. The predictable payments make it easy to budget without worrying about fluctuating interest charges.
Pros And Cons Of Affirm
Pros
- Very flexible loan amounts and terms
- Interest-free options available
- Can be used at or outside participating retailers
- Rewards program offers cashback and discounts
Cons
- Hard credit check when you accept loan
- Higher minimum credit score requirement
- Longer approvals take up to 15 minutes
- Interest rates on longer term loans
Best For
Affirm is better for those with good credit who want maximum flexibility on a wide range of purchase amounts. The interest-free 3–6-month loans are great for repaying smaller purchases interest free. Longer term loans allow you to finance big ticket purchases at competitive rates.
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Should You Use Acima Or Affirm?
Deciding between Acima and Affirm depends on your credit profile and purchase. Here are some key questions to help choose:
- What is your credit score? Affirm requires a much higher minimum credit score. Acima is better for poor or fair credit.
- What amount do you need financed? Acima has fixed limits that may not work for small or large purchases. Affirm offers more flexibility.
- Do you prefer fixed or variable loan terms? Acima offers predictable set term loans. Affirm offers tailored 3-36 month financing.
- Are you shopping at a partner retailer or anywhere? Acima is accepted at specific retailers. Affirm can be used almost anywhere that accepts their card.
- Is interest-free financing important? Acima is completely interest free. Only short term Affirm loans are 0% APR.
For modest cost purchases and lower credit borrowers, Acima offers a simple interest free solution. Affirm provides more flexible financing amounts and terms for those with higher scores. Assess your personal situation to determine which option best suits your needs.
Also know more about Acima!
Frequently Asked Questions (FAQ)
The maximum purchase amount with Acima is $2,500. There is no revolving line of credit. Acima approves you for a one-time fixed payment lease tied to a specific product.
Acima is an excellent financing option for people with lower credit scores. The predictable payment schedules, lack of interest, and easy approvals make it very accessible. Just be aware late payments hurt your credit.
You can qualify for Acima with a minimum credit score of 525. Some retailers may have slightly higher requirements around 550. Acima focuses on serving borrowers overlooked by other lenders.
Acima only runs a soft credit check that has no impact when you apply. However, if you miss multiple lease payments it can negatively affect your credit like any other loan. Timely payments help demonstrate you can manage credit responsibly.
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The Bottom Line
Acima and Affirm both offer flexible ways to spread out costs over time. But they cater to different credit profiles and financing needs.
Knowing the key differences allows you to choose the right BNPL provider for each unique purchase scenario. This ensures you get affordable payment terms that fit your current budget and financial capabilities.
Carefully read all loan details to understand the payment schedule, fees, and impact on your credit before committing. Used wisely, BNPL services like Acima and Affirm are powerful tools to access the products and services you want while better managing cash flow.