Affirm to offer buy now, pay later option for rent payments

Buy now, pay later giant Affirm is looking to help renters break up housing payments in ways that align with their biweekly paychecks.

Affirm is piloting a program in partnership with financial technology platform Esusu that will allow renters to split their monthly rent in two equal payments every two weeks at 0% APR. There are no hidden or late fees, or compounding interest with this pilot program, either, according to Affirm.

Esusu helps renters build credit by reporting their on-time rent payments to major credit bureaus.  

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The pilot program is designed to give “eligible renters a flexible option for managing one of their largest monthly expenses,” Affirm said in a statement to FOX Business, calling it “a transparent option that offers flexibility for renters to align expenses with their paychecks.”

Affirm said it underwrites every application individually and only approves people for what it believes they can responsibly afford to repay. 

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“We’re approaching this use case thoughtfully and evaluating it alongside Esusu, which shares our focus on clear, consumer-first financial tools,” Affirm continued. 

The company didn’t confirm when the pilot program would be officially rolled out as it is still in the early stages of the pilot.

LendingTree’s chief consumer finance analyst Matt Schulz told FOX Business that this could be useful to those on a tight budget, but he cautioned that it is too soon to make a final judgment. 

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“This is just another example of how it is getting easier seemingly by the day for people to use BNPL to finance most anything,” Schulz said. 

He noted that this doesn’t appear to be a typical pay-in-four BNPL loan, which, if it was, he cautioned that there could be serious risks. For instance, Schulz noted that a consumer could still have people paying off the previous month’s BNPL loan for rent when the next month’s rent comes due. 

“That could get messy,” he said, adding that this financial tool can be really useful when used wisely, but “the danger with BNPL is when you have multiple loans that you have to manage.” 

“That can get tricky, especially if you’re not used to managing credit,” he said. 

The other key thing with this payment method is that it is tied to a debit card or checking account, so it is critical that users have enough cash in that account to pay the bill.