Perpay vs Affirm

Executive Summary

Both Affirm and Perpay are Buy Now Pay Later platforms that allow consumers to stretch out paying their purchases at 0% interest. Afirm is more like a traditional BNPL app in that they offer the standard Pay-in-4 payment option as well as a monthly payment option for larget purchases. Unlike Affirm, Perpay requires you to split your payroll direct deposit such that you will pay your installments to Perpay directly from your payroll, thereby reducing the risk of being delinquent. Perpay also allows you to choose your payment plan (up to 6 months though the frequency of your payment has to match your payroll date). Perpay reports your payments to all three major credit bureaus whereas Affirm does not. If you are looking for a BNPL app that also reports to credit bureaus to help you in your credit building, then Perpay is the better choice over Affirm.

What is Affirm?

Affirm is a buy now pay later app that gives you the option of paying a purchase in 4 installments (the standard Pay in 4) or to pay monthly on larger purchases. Pay in 4 option is normally reserved for purchases within the $50 - $1,000 range. In contrast, the monthly payment option is reserved for larger purchases of up to $5,000. Like most BNPL app, no interest is charges for the Pay-in-4 payment option. For the monthly payment option, the interest rate is between 0% - 36% and the payback period is between 3 to 60 months.

Affirm also offers a Affirm Card that can also be used as a debit card for regular purchases. If you wish to pay-over-time when using the Affirm card, you can request to split eligible purchases into payment plans via your app before you make the purchases or up to 24 hours after the purchases is made.

Affirm only reports your first installment loan to Experian. Subsequent loans are not reported.

What is Perpay?

Perpay is an onine market place with partnerships with lot of merchants where you can buy branded products and pay later without paying an interest.

Perpay allows you to choose your payment period and you can take up to 6 months to finish paying your product. They do not charge any interest and so the APR is 0%. Perpay also requires you to split your payroll direct deposit such that your payment to Perpay will come directly from your payroll. You can do so either via your employer or Perpay can also do it for you.

Unlike most other BNPL apps, Perpay will report your payment and credit lines to the three major credit bureaus (TransUnion, Equifax and Experian) when you subcribe to Perpay+. Perpay+ is their credit bureau reporting service and has a $3/month fee as long as you are making a payment to Perpay for your product purchase.

Approval Requirements

Both Perpay and Affirm have slightly different approval criteria.

Affirm does not perform any hard inquiries

Though Affirm does not perform any hard inquiries, you may be declined. They do still look at your credit score, credit utilization, amount of debt and recent bankruptcies.

Perpay Has No Hard Inquiries

Perpay does not perform any hard inquiries nor rely on FICO scores to approve you. Instead, you need to have 3 months of employment and income, no active bankruptcies and no delinquent accounts.

Similarities

Affirm and Perpay are similar in the following ways:

No Hard Inquiries

Both Affirn and Perpay do not perform any hard inquires when you apply. However, Affirm still performs a soft inquiry and does rely on credit scores, debt levels, utilization ratios to determine whether to approve you.

Perpay does not perform any hard inquiries as well. Instead, it relies on you having a steady income (at least 3 months), no active bankruptcies and no delinquent accounts.

Both have 0% APR on their typical payment plans

Both Perpay and Affirm offer 0% APR for their plans.

Differences

Affirm and Perpay are different in the following ways:

Perpay reports to all three major credit bureaus while Affirm does not

Perpay reports to all three major credit bureaus (TransUnion, Equifax and Experian). You do have to activate Perpay+, which will cost you $3/month when you have payments to pay to Perpay.

Affirm will report your first installment loan to Experian only. Subsequent loans from them are not reported. However, if you miss a payment and do not repay within 30 days, your missed payment will be reported.

Different Credit Limits

Perpay will start you off with a credit limit ranging from $500 to $1,000 and this will increase over time if you make more purchase and pay on time.

With Affirm, the credit limit for the Pay-in-4 method ranges from $50 to $1,000 while the credit limit for the monthly payment plan ranges from $50 to $5,000.

0% APR with Perpay

Perpay charges 0% APR with their purchases regardless of payment plans. Affirm charges 0% APR for their Pay-in-4 plan but the APR ranges from 0% to 36% for their monthly plan.

Different Payment Period

Affirm has a standard Pay-in-4 option like most other BNPL apps. They also offer monthly payments ranging from 3-60 months with the interest ranging from 0% to 36%.

Perpay allows you to choose a payment period up to maximum of 6 months. The number of payment matches your payroll cycle. If you are paid twice monthly, then payments to Perpay will be set at that schedule as payment is taken directly from your payroll.

Payments for Perpay are taken directly from your payroll

Perpay is unique in that you have to split your payroll direct deposit such that a portion of your payroll goes directly into paying your Perpay payments for the goods you have bought. You can split your payroll direct deposit if your employer allows this or Perpay can set it up for you.

With Affirm, you simply make your payment with either a debit card or checking account.

Ways which Perpay is better

Perpay is better than Affirm in the following ways:

Perpay reports to the three major credit bureaus

Perpay reports to all three major credit bureaus (TransUnion, Equifax and Experian). You do however have to enroll in Perpay+ and there will be a $3/month charge for this credit reporting service. When you have finished making your payments to Perpay or are not making any payments to Perpay, the $3/month fee will be waived.

In contrast, Affirm only reportes your first loan payment to Experian only.

Perpay allows you to choose your payment plan up to 6 months

Perpay allows you to choose your payment term for up to 6 months. In contrast, Affirm offers the standard Pay-in-4 payment plan that is so common among other Buy Now Pay Later apps.

Perpay payments are automatically deducted from your payroll

Though it might be a slight hassle to set up, having your payments to Perpay taken directly from your payroll direct deposit assures that you will never have a late payment.

Perpay does not rely on FICO scores

Perpay does not rely on FICO scores for approving you but instead requires 3 months of employment and income, no active bankruptcies and no delinquent accounts.

While Affirm does not perform any hard inquiries, they do rely on traditional credit score and other metrics like utilization ratio, total debt etc. The approval criteria is not as clear cut.

Ways which Affirm is better

Some consumers may prefer Affirm over Perpay for the following reasons:

Longer payment period

Though Affirm offers the traditional Pay-in-4 plan, they also offer monthly payment plans with terms up to 60 months for credit limits up to $5,000. This is something that Perpay does not offer. If longer term financing is what you are looking for, then Affirm is better in this aspect.

Uncomfortable with the idea of split payroll direct deposit

Unlike Perpay which requires you to split your payroll direct deposit and pay them directly, Affirm is a traditional BNPL app and you can use either your checking account or debti card to pay your Affirm installments.

Which is better? Perpay simply because they report to credit bureaus

If I had to choose between Perpay and Affirm, I would go for Perpay simply because Perpay can help build or rebuild your credit because it reports to all three major credit bureaus. Because Perpay requires you to split your payroll direct deposit between your bank account and another portion to pay them, it is very much a set and forget thing and there is very little chance that you will ever miss a payment. This is very important because many people have gotten into financial debt because they misuse BNPLs.

However, if building or rebuilding your credit is not a concern and you simply want a traditional BNPL, then Affirm is as vanilla as they come.