Loan Companies Like Affirm, Bread, Klarna, Greensky

ElitePersonalFinance
Last Update: September 8, 2021 Loan Reviews Loans

Loan companies like Affirm, Affirm, Bread, Klarna, Greensky, Autopay? Have you heard about them? “Buy Now Pay Later,” BNPL, POS Financing, … it’s the same. It’s a type of new but high-growing lending business. Below we will review one of the largest BNPL companies. For people who want to learn more, we have comprehensive guides:

Best Buy Now Pay Later Sites and Apps 2021 – Our complete BNPL guide. There we explain what’s actually behind this business and give you all of the biggest names. Affirm, Affirm, Bread, Klarna, Greensky, Autopay are only the biggest names. In fact, there are hundreds of sites and apps.

Best Buy Now Pay Later Apps No Credit Check 2021 – Most BNPL customers have bad credit and have problems being approved on personal loans. Here we list all of the biggest names that work for people with bad credit.

Let’s start with a quick overview of the companies that we will review below.

Loan Company: Min. Credit Score: APR: Amount:
Affirm 0 0% – 30% Up to $17,500
Bread 0 0% – 29.99% Up to $20,000
Klarna 0 0% – 29.99% Up to $35,000
Greensky 0 0% – 26.99% Up to $65,000
Afterpay 0 0% Not Disclosed

As you can see the most of their credit score requirements are low. That’s why these companies have become lucrative for those with bad credit. But all of these sites also have disadvantages. We explain them in our guide. However, in brief, these lenders try to manipulate people into buying more than they actually planned. Their repayment terms are limited and not good at all. Some of their APRs can be more than these from personal loans.

That’s why, as we have mentioned in our guides, we recommend people to also shop around with personal loans. Even for those with bad credit, personal loans are available, and sometimes they beat BNPL companies. Here are the top loans from our marketplace.

But what about bad credit?

First of all, people with bad credit can get approved on a personal loan. Here are a few links from our marketplace that should work:

Best Personal Loan Comparison Sites 2021

Best Personal Loans for Banks 2021

Best Personal Loans for Credit Unions 2021

Best Personal Loans for Bad Credit 2021

If you are with bad credit, we highly recommend that you watch our video:


Now, let’s move on with the top BNPL sites.

Affirm

Loan Amount: Up to $17,500
APR: 0% – 30%
Min. Credit Score: 0
Approval: 1 Day
Terms: 3 – 48 months
Origination Fee: N/A
DTI Ratio: N/A
CHECK RATES

Offering loans up to $17,500, Affirm is one of the leading POS lenders in the marketplace today. APRs range from 0% to 30%, and active-duty military personnel have APRs capped at 6%. Loan duration varies from 3 to 12 months but can extend to 48 months for larger loans. However, finalized terms depend on where the item is purchased and your overall credit profile. Affirm also has no minimum credit score and annual income requirement, making it a great option for borrowers with bad credit.

The best part about the service is the company charges zero fees. There are no loan origination fees, prepayment fees, service fees, or late payment fees. However, because Affirm reports your repayment behavior to Experian – a leading U.S. credit bureau – late payments can affect your credit score.

So how do you apply for an Affirm loan?

Well, after you create an account, you have three options.

  • Apply at the store. Add the item to your checkout cart, enter your mobile phone number, then enter the 4-digit pin sent to you by the company. Once complete, you’re notified whether or not you qualify for a loan and given your finalized terms.
  • Apply using its mobile app. Download the Affirm app from the Apple App Store or Google Play Store and follow the first two steps above; after you’ve entered the 4-digit pin, you click on ‘request a loan.’ Next, you let Affirm know where you’re shopping and the amount of money you need. Once complete, you’re notified whether or not you qualify for a loan and given your finalized terms.
  • Apply through Affirm. Sign in to your Affirm account and type in the 4-digit pin texted to your phone. Click ‘Request a loan’ and let Affirm know where you’re shopping and the amount of money you need. Once complete, you’re notified whether or not you qualify for a loan and given your finalized terms.

And what do you need to qualify?

  • You must be at least 18 years of age or 19 in Alabama and Nebraska.
  • You must be a U.S. citizen or a permanent resident.
  • You must have a mobile phone number for verification purposes.

When it comes time to repay your loan, you either log into your online account or use the mobile app. Here you can transfer funds from your checking account or debit card. If you prefer, you can also mail the company a physical check.

Affirm financing is available in every U.S. state except for West Virginia and Iowa. Because of state law, Affirm is not allowed to offer loans in these jurisdictions.

Now, what about Affirm partner stores?

Sporting various consumer options, Affirm partners with fashion, travel, sports and fitness, electronics, beauty, kitchen, automotive, and music retailers. Their most well-known partners are Warby Parker, Expedia, Wayfair, Hoover, and Casper.

Pros:

  • Easy and fast approval.
  • High loan amounts upwards of $17,500.
  • APRs range from 0% to 30%; APRs are capped at 6% for active military members.
  • Affirm charges zero fees: no loan origination fees, prepayment fees, service fees, or late payment fees.
  • There is no minimum credit score requirement or annual income requirement.
  • Affirm reports your repayment behavior to Experian, which can increase your credit score if you pay in full and on time.

Cons:

  • Not all applicants qualify.
  • Since Affirm reports to Experian, late payments can hurt your credit score.
  • Loans are not available in West Virginia or Iowa.
  • A mobile phone number is required to use the platform.

Conclusion:

If you need financing and credit cards aren’t a viable option, Affirm POS loans are a great way to obtain the funding you need at a competitive interest rate. The company APRs range from 0% to 30%, but your finalized rate will likely fall near the top end of the range if you have bad credit. APRs are capped at 6% for active-duty military members, making it a great option if you’re currently in the service. What separates Affirm from other lenders is the company charges zero fees. There are no loan origination fees, prepayment fees, service fees, or late payment fees – which means your only out-of-pocket cost is the interest-owed. So while an unsecured personal loan should always be your first option, POS financing from Affirm is a great alternative for borrowers that don’t qualify.

Bread

Loan Amount: Up to $20,000
APR: 0% – 29.99%
Min. Credit Score: 0
Approval: 1 Day
Terms: 3 – 48 months
Origination Fee: N/A
DTI Ratio: N/A
CHECK RATES

Offering loans from $100 to $20,000, Bread is another reliable POS lender that tops our list. APRs range from 0% to 29.99%, and terms range from 3 to 48 months. Bread also charges zero prepayment fees, so there’s no penalty for paying off ahead of time.

To determine your credit limit and APR, Bread works with its partner institution – Cross River Bank – to assess credit risk and provide loan terms that match your credit profile. The company only conducts a soft credit pull, so none of its practices will hurt your credit score. But keep in mind, Bread does report your repayment behavior to TransUnion, so late payments can hurt your credit score.

To qualify for a Bread account, you must:

  • Be at least 18 years old or 19 in Alabama and Nebraska.
  • Be a legal resident of the United States.

Bread will typically notify you within 30 minutes outlining why you weren’t approved if your loan application is denied. There is a special category of offers, where customers are approved by Bread but not for the full amount. The amount will be sent in 7 days after the application. But keep in mind, after a denial, you can’t apply for another Bread loan for the following 90 days.

Bread offers a ‘split payment’ loan to borrowers who don’t qualify for a full loan as a middle-ground option. Rather than finance the entire purchase, Bread lets you pay a certain amount upfront – using your debit or credit card – and the company will finance the remaining balance.

Pros:

  • High loan amounts, up to $20,000.
  • APRs range from 0% to 29.99% and rates no higher than 6% for certain eligible service members.
  • Bread performs a soft credit pull so that applying won’t hurt your credit score.
  • There are zero prepayment fees.
  • If you don’t qualify for the full amount, you may be eligible for a ‘split payment’ loan.
  • Bread reports your repayment behavior to TransUnion, which can boost your credit score.

Cons:

  • Not all applicants qualify.
  • Since Bread reports to TransUnion, severe delinquency can hurt your credit score.
  • A mobile phone number is required to use the platform.

Conclusion:

Like Affirm, Bread is another reliable POS lender that makes the checkout process seamless and easy. The company offers loans of up to $20,000 and APRs ranging between 0% to 29.99%. Bread offers a great alternative if you can’t obtain an unsecured personal loan. With APRs similar to personal loans, the company allows you to keep your interest costs at a manageable level. There are no prepayment fees, and the company doesn’t list any late payment charges. So, if you’re looking for a reliable financing option for your next retail purchase, put Bread near the top of your list.

Klarna

Loan Amount: Up to $35,000
APR: 0% – 19.99%
Min. Credit Score: 0
Approval: 1 Day
Terms: 1 – 36 months
Origination Fee: N/A
DTI Ratio: N/A
CHECK RATES

As another reliable POS lender, Klarna has APRs that range from 0% to 19.99%, which is 10% less than its competitors. There is no minimum credit score to qualify, and loan duration range from 30 days to 36 months. The company also charges zero loan origination fees and zero prepayment fees. However, late payment fees range from $10 to $35, and return payment fees can be upwards of $35.

A major difference between Klarna and its competitors above is the company doesn’t directly disclose its maximum credit limits. The minimum purchase to use the service is $35. However, the maximum amount depends on your purchase, credit history, and affordability assessment.

When purchasing an item through the Klarna app, you have three payment options to choose from:

  • Pay later. This option allows you to purchase an item and try it for 30 days. You’re billed when the item ships, but you don’t pay any interest fees if you pay the balance within 30 days. If you return the item within 30 days, interest charges won’t apply.
  • Slice it. This option is Klarna’s line of credit. Like a credit card, you can purchase multiple items and pay back the proceeds over time. You also have to make minimum monthly payments on your balance, but interest charges can be waived if you repay the funds within a certain time frame. The standard APR for its credit line is 19.99%, but it can be less for special purchases and promotional periods.
  • Pay in 4 interest-free installments. Here, you pay for your item using four equal installments. The process works like this: you make your first payment upfront, then Klarna bills your debit or credit card every two weeks until four payments are complete. Like ‘Pay Later,’ there are no interest charges if you don’t miss a payment.

For the ‘Pay Later’ option, if you don’t repay the balance by the due date, you will be subject to a late payment fee of $10. Klarna also performs a credit check, but it is a soft pull.

For the ‘Slice It’ option, your minimum monthly payment is greater than $25 or 2% of your outstanding balance plus interest and applicable fees. Be aware that, Klarna conducts a full credit check here, so a hard credit pull will most likely apply. As well, late payment fees can cost upwards of $35.

For the ‘Pay In 4 Interest-Free Installments,’ there is no credit check. But if you choose this option, you can’t refinance your loan. As well, late fees cost upwards of $10.

What makes Klarna so popular is the company partners with plenty of well-known retailers. These include Nike, Adidas, Taylor Made, Microsoft, Expedia, H&M, Overstock, etc.

Pros:

  • APRs are less than their competitors and are capped at 19.99%.
  • ‘Pay Later’ and ‘Pay In 4 Interest-Free Installments’ allow you to finance items without paying interest.
  • There are zero loan origination fees and zero prepayment penalties.
  • ‘Pay In 4 Interest-Free Installments’ requires no credit check.
  • You can obtain lower APRs for special purchase items and during promotional periods.
  • Klarna partners with many well-known retailers.

Cons:

  • For large purchases, not all applicants qualify.
  • For ‘Pay Later’ and ‘Pay In 4 Interest-Free Installments,’ a late fee of up to $10 will apply, and for the ‘Slice It’ option, a late fee of up to $35 will apply.
  • The ‘Slice It’ option requires a full credit check, which may impact your credit score.

Conclusion:

Since expanding into the U.S. market in 2015, Klarna has established relationships with plenty of well-known retailers. Whether it’s companies like Nike, Microsoft, or Taylor Made, Klarna offers financing solutions at places you actually want to shop. Best of all, Klarna offers extremely affordable APRs. While its competitors are capped at roughly 30%, Klarna caps its APR at 19.99%. Moreover, the company offers three different financing options. You can choose from ‘Pay Later’ and ‘Pay In 4 Interest-Free Installments’ – which allows you to spread out your payments interest-free – or choose the ‘Slice It’ option, which acts as a line of credit. Whatever your preference, with Klarna, you can find affordable financing to help make your next big purchase a reality.

Greensky

Loan Amount: Up to $65,000
APR: 0% – 26.99%
Min. Credit Score: 0
Approval: 1 Day
Terms: 6 – 12 months
Origination Fee: N/A
DTI Ratio: N/A
CHECK RATES

Specializing in home improvement financing, Greensky partners with over 15,000 merchants to generate funding for consumer home repairs. So whether it’s upgrading your kitchen or fixing a leaky roof, Greensky can provide the financing you need for almost any job.

Loans top-out at $65,000 and its APRs range from 0% to 26.99%. Since loans are used for long-term projects, repayment duration ranges from 6 months to 12 years. Keep in mind that Greensky isn’t an actual lender. The company acts as a middle-man, connecting banks and home improvement retailers with borrowers. The process results in increased efficiency and enables both banks and retailers to manage credit risk effectively.

So how do you apply for a Greensky loan?

Well, the process is stricter than the platforms above. To obtain financing, you need to send them a photo of your driver’s license for verification. Next, you open an account through its mobile app. Input your name, date of birth, annual income, desired loan amount, and Social Security Number. To determine whether or not you qualify for a loan, Greensky performs a hard credit pull, which can hurt your credit score. If approved, you obtain a credit line that can be used for nearly any home improvement or repair project.

Greensky offers two different loan structures:

  • Deferred interest loans. This option has an interest-free promotional period that ranges from 6 to 24 months. If you repay the loan proceeds before the promotional period ends, you don’t incur interest fees. However, any amount left over after the promotional period incurs an APR from 4.99% to 23.99%.
  • Reduced-rate loans. If you prefer a longer loan duration, you can opt for a reduced rate loan that’s repaid over 5 to 12 years. APRs range from 0% to 26.99%, but the finalized rate depends heavily on your credit profile.

With Greensky, there are zero loan origination fees, but you are charged a one-time account activation fee of $39. And although it’s not a requirement, most borrowers on the platform have good to excellent credit scores, making it hard for those with bad credit to obtain loans. However, Greensky does offer a co-signer option, which will improve your chances of being approved.

Pros:

  • High loan amounts upwards of $65,000.
  • Fair APRs range from 0% to 26.99%.
  • Promotional periods of 6 to 24 months allow you to repay the balance in full without incurring any interest charges.
  • There are no origination fees.
  • Its co-signer option can increase your chances of approval.

Cons:

  • Financing can only be used for home improvement projects or repairs.
  • Greensky performs a hard credit pull, which can hurt your credit score.
  • Although there is no minimum credit score requirement, applicants with bad credit may not qualify.
  • The company charges a one-time account activation fee of $39.

Conclusion:

Greensky is a great place to start if you need reliable home improvement financing. Loans can reach upwards of $65,000, and APRs are capped at 26.99%. The best part about a Greensky loan is the company offers long promotional periods. Spanning from 6 to 24 months, you won’t incur any interest charges if you repay the funds before the promotional period ends. Keep in mind that interest charges will apply to the remaining balance once the promotional period ends. The downside of Greensky is that the company performs a hard credit pull, which can negatively affect your credit score. As well, borrowers with bad credit may not qualify. The company doesn’t have a minimum credit score requirement, but most applicants have good to excellent credit. As a side benefit, the company does offer a co-signer option. So if you have bad credit but know someone willing to act as a guarantor, it will greatly improve your chances of obtaining a loan.

What are The Pros and Cons of POS Financing?

While POS financing is great under certain circumstances, we only recommend a POS loan after you’ve exhausted all other resources.

Pros:

  • Fast and easy approval. With no minimum credit score requirement and immediate access to funds, you receive the financing you need in no more than a few minutes.
  • Great if you have bad credit or no credit. When you have bad credit or no credit history, it’s hard to obtain reliable financing. When personal loans and credit cards aren’t an option, POS financing is a great alternative.
  • Seamless technology. POS platforms make financing easy and intuitive. Your APR and loan terms are clearly presented at the click of a button, making the entire process hassle-free.

Cons:

  • Loans are expensive. With APRs upwards of 30%, interest costs will add up quickly. For example, if you use Affirm to purchase a queen-size mattress from Casper for $1,095 – assuming a 30% APR repaid over 12 months – you’re looking at $186 in total interest paid.
  • You risk falling into a debt trap. When financing is this easy, you may end up purchasing items you don’t even need. If you don’t keep track of your spending, bills can quickly get out of hand.
  • You don’t have time to read the terms and conditions. When you’re excited about purchasing a new item, the last thing on your mind is loan origination fees, late payment fees, return fees, how a late payment affects your credit score or whether your data is shared with third-party vendors; but these issues are important and a few minutes at the checkout just doesn’t cut it.

Should POS Financing be Your First Option?

When credit is accessible right at your fingertips, it can lead to impulse purchases and spending beyond your means. If it gets out of control, you can find yourself stuck in a vicious debt trap.

We don’t want that to happen.

So, before you opt for a POS loan, try this pathway first:

  • Go to the store or shop for your favorite product online. If you have your eye on a certain product – rather than purchasing it right away – file it away and move on to step two.
  • Apply online for an unsecured personal loan. Even if you have bad credit, unsecured personal loans are available to borrowers of all credit scores. Processing takes as little as 1 to 3 business days.
  • Choose the option with the lowest APR. Remember, personal loans have APRs that range from 5.99% to 35.99%. Regardless of your credit score, it’s possible to obtain a personal loan with 10% or less APR.

Conclusion

While POS financing can make big-ticket items more attainable, we recommend you exercise caution before diving in. After analyzing thousands of lending products, we know that unsecured personal loans are the best option in the marketplace today. APRs are extremely affordable, and personal loans offer greater repayment flexibility. Conversely, with POS financing, you receive similar benefits, but APRs are much higher, and the easy approval process can lead you to spend beyond your means. Now, if it’s an emergency and the item is required right away, POS financing may be right for you. However, if the item can wait, obtaining a reliable personal loan will keep your out-of-pocket costs at a minimum.

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