Affirm Introduces 'Buy Now, Pay Later' for Rent Payments

• The pilot offers 0% APR with no hidden fees, late fees, or compounding interest, and Affirm underwrites each application individually
• Esusu partners with Affirm to help renters build credit by reporting on-time payments to major credit bureaus
• Financial analysts warn that managing multiple BNPL loans simultaneously could become complicated, especially since payments are tied to debit cards or checking accounts requiring sufficient cash reserves

Summary

Affirm Expands BNPL Services to Rent Payments

Affirm is piloting a "buy now, pay later" (BNPL) program for rent payments in partnership with fintech platform Esusu. The program allows renters to split monthly rent into two equal bi-weekly payments at 0% APR, with no hidden fees, late fees, or compounding interest.

Key Program Details:

• Payments align with biweekly paychecks to help manage cash flow
• Individual underwriting for each application to assess affordability
• Tied to debit cards or checking accounts, requiring sufficient funds
• Partner Esusu reports on-time rent payments to credit bureaus to help renters build credit
• Still in early pilot stages with no confirmed rollout date

Market Implications:

The initiative represents BNPL's expansion beyond traditional retail purchases into essential living expenses. LendingTree chief consumer finance analyst Matt Schulz noted this reflects the growing ease of using BNPL for "most anything," though he expressed caution about the model's risks.

Expert Concerns:

• Unlike typical pay-in-four BNPL loans, which could create overlapping payment obligations when rent comes due monthly
• Managing multiple BNPL loans simultaneously can be challenging, especially for those inexperienced with credit management
• Success depends on users maintaining adequate account balances for automatic withdrawals

The program targets renters seeking payment flexibility for their largest monthly expense, though analysts recommend waiting for more data before drawing final conclusions about its effectiveness and potential risks to consumers.