Take our Sleep Quiz to find the perfect mattress for you!
Free Shipping within the Continental US!
Save 10% on Mid-Century Furniture with code MIDCENTURY10!
50% off any Twin or Twin XL mattress when you buy any Queen, King, or CAL King with code OKIOKIBUNDLE!

Bedtime Stories

How is interest on an Affirm loan calculated?

Affirm calculates the annual percentage rate (APR) of a loan using simple interest, which equals the rate multiplied by the loan amount and by the number of months the loan is outstanding.

This model differs from compound interest, in which the interest expense is calculated on the loan amount and the accumulated interest on the loan from previous periods. Think about compound interest as “interest on interest,” which can increase the loan amount. Credit cards, for example, use compound interest to calculate the interest expense on outstanding credit card debt.   

Subscribe to our Bedtime Stories

Be the first to hear about new product updates, industry news, curated OkiOki stories, and everything in between. And don’t worry, we won’t clutter your inbox.

Your cart