Summary: Apple Pay Later requires a credit check for loan approval, with loans ranging from $50 to $1,000. The soft credit check ensures borrowers can repay in four installments over six weeks, interest-free. Apple Financing LLC handles the service, with Goldman Sachs as the loan issuer. Loan and payment history may affect users’ credit scores, as it could be reported to credit bureaus.
Apple has recently launched its highly anticipated Apple Pay Later feature, which enables users to split payments for purchases into four installments over six weeks, with the first installment due at the time of purchase. This feature has already become popular among iOS users, and many are curious about how the credit check process works. In this article, we will explore in-depth the Apple Pay Later credit check process, how it affects users’ credit scores, and how Apple’s own financial subsidiary handles loan approvals and credit checks.
Apple Pay Later: A Brief Overview
Before delving into the credit check process, it is essential to understand how Apple Pay Later works. Apple Pay Later is a “Buy Now, Pay Later” service that allows users to finance purchases from $50 to $1,000 using a debit card connected to Apple Wallet. The service enables users to split payments for purchases into four interest-free installments over six weeks, with the first installment due at the time of purchase. Users can manage their payments through the Apple Wallet app, which allows them to view their payment schedule and make payments manually.
Credit Check Process for Apple Pay Later
Apple Pay Later is a lending service, which means that Apple needs to run a credit check before approving users for the service. To ensure that borrowers are capable of paying back the loans, the tech giant will run a soft credit check before providing approval. Soft credit checks do not affect the user’s credit score and are used to evaluate creditworthiness.
If the user is approved for the service, Apple will extend a loan that will be used to finance a purchase. The user will then be required to make payments in installments over six weeks, with the first payment due at the time of purchase. The amount of the loan is likely to be capped at around $1,000, and if the user cannot manage to repay the amount, Apple will no longer extend credit for that user.
Credit Reporting and Impact on Credit Scores
Apple has stated in the footnotes of its press release that a user’s Apple Pay Later loan and payment history “may be reported to credit bureaus,” which may impact their credit score. The impact of Apple Pay Later on the user’s credit score will depend on how the user manages the loan and payment history. If the user makes payments on time and repays the loan in full, their credit score is likely to improve. However, if the user fails to make payments or defaults on the loan, their credit score may be negatively impacted.
Apple Financing LLC: Handling Loan Approvals and Credit Checks
To make the Apple Pay Later service private and trustworthy, the company has designed its own financial subsidiary called Apple Financing LLC, which handles loan approvals and credit checks. Apple Financing LLC is regulated by the Office of the Comptroller of the Currency (OCC) and is authorized to operate in all 50 states.
Banking partner Goldman Sachs is the official loan issuer for the service, which means that it underwrites the loans and manages the risk. Goldman Sachs is a leading investment bank and has a strong reputation for managing credit risk. The partnership between Apple and Goldman Sachs ensures that users can trust the Apple Pay Later service and have access to competitive interest rates and loan terms.
Conclusion
Apple Pay Later is a convenient and innovative service that enables users to finance purchases and split payments into interest-free installments. The credit check process for Apple Pay Later is designed to ensure that borrowers are creditworthy and capable of paying back the loans. Apple Financing LLC handles loan approvals and credit checks, while banking partner Goldman Sachs underwrites the loans and manages the risk. By using Apple Pay Later responsibly and making payments on time, users can improve their credit scores and access better financing options in the future.