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Zip personal loans: 2024 Review

Updated on Nov. 15, 2023
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At a glance

4.2
Rating: 4.2 stars out of 5
Bankrate Score
Caret Down
Availability
Rating: 5 stars out of 5
5.0
Affordability
Rating: 4.2 stars out of 5
4.2
Customer Experience
Rating: 4.8 stars out of 5
4.8
Transparency
Rating: 3 stars out of 5
3.0

About Bankrate Score

Founded in Australia in 2013, Zip’s goal is to ensure everyone has access to flexible credit. Zip buy now, pay later loans allow consumers to shop their favorite brands and pay off their purchases in six weeks. 

Moneybag
Loan amount Not disclosed
Rates
APR from 31.11%+
Clock Wait
Term lengths 6 weeks

Borrowers who are looking for buy now, pay later financing.

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Best for buy now, pay later financing

Zip gives you the funds to make instant purchases, which are then repaid in four installments spread over six weeks. You can use your funds nearly anywhere Visa is accepted with either online or in-person purchases available. Instead of charging interest, you will pay Zip a set installment fee for your purchase. Simply peruse the store directory for a list of accepted retailers and shop away.

Zip pros and cons

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Pros

  • Quick financing.
  • Convenient mobile app.
  • Chrome extension.
Red circle with an X inside

Cons

  • Limited repayment schedule.
  • Fees vary.
  • Not available in Vermont.

Do you qualify?

When you are ready to make your purchase, Zip offers on-the-spot decisions without affecting your credit score.

To open a Zip account, you must meet the following criteria:

  • Be a U.S. resident.
  • Be 18 years of age or older.
  • Have a valid U.S. mailing address (APO, FPO, A.E. P.O. and P.O. Box not accepted).

You must use a U.S.-based credit or debit card for your purchase and will also need to provide a verifiable mobile number. In some cases, Zip may require that you provide the last four digits of your Social Security Number in order to confirm your identity.

What Zip doesn’t allow funds to be used for

Zip funds may be used at any approved retailer bearing the Zip logo. It does not share further details about the assessment process or what items are not approved. There is also a maximum limit of $2,000 for Zip accounts, restricting what you can buy with your funds. Gift cards are permitted, although Zip warns of processing issues for some transactions.

How this lender compares

logo
Rating: 4.2 stars out of 5
4.2
Bankrate Score
APR from
31.11%+
Loan Amount
Not disclosed
Term Length
6 weeks
Min Credit Score
Not disclosed
logo
Rating: 4.6 stars out of 5
4.6
Bankrate Score
APR from
Not disclosed
Loan Amount
$20-$575
Term Length
35 days
Min Credit Score
Not disclosed
logo
Rating: 3.6 stars out of 5
3.6
Bankrate Score
APR from
Varies by state
Loan Amount
$300-$7,500
Term Length
Not disclosed
Min Credit Score
Not disclosed

Zip Vs. Klarna

Zip and Klarna both utilize the buy-now, pay-later purchasing model that is so popular today. However, Klarna is significantly bigger with access to over 500,000 different merchants worldwide; Zip is less with under 24,000 partners. Klarna also offers greater flexibility with its payment terms, allowing you to choose from multiple options, while Zip sticks to just one payment schedule option. However, Zip charges a far lower fee than Klarna’s APR that ranges up to 34% for purchases. 

Zip vs. Afterpay

Both Zip and Afterpay are companies founded in Australia, but Zip remains the larger of the two with Afterpay being accepted at over 15,000 merchants total. Afterpay uses the traditional percentage-based fee schedule with an APR of up to 36 percent, compared to Zip’s flat installment fee. It also charges higher fees with late penalties starting at $10 and increasing from there. However, Afterpay offers more options for repayment, giving you a choice of three different repayment models compared to Zip’s lone option.

Zip: in the details

What we like and what we don’t like

Zip offers fast financing with a buy-now, pay-later model that is easy to use, although it does have some drawbacks.

What we like 

  • Use anywhere Visa is accepted. Your Zip purchase can be made nearly anywhere Visa is accepted.
  • No impact to your credit score. Zip does not perform a hard credit check that can impact your credit score. 
  • Set payments. You can have your purchase paid off in four installments over six weeks. 

What we don’t like

  • No international purchases. Zip can only be used in the United States.
  • Installment fee. There is an installment fee that applies to every purchase, working as a finance charge.
  • Late fees apply. Zip charges a late fee to your account if you fail to make an on-time payment.  

How to contact Zip

Zip is available to help with any questions you have through its customer support team. It is available seven days a week from the hours of 7:00 a.m. to 11 p.m. EST. You can also send an online message via the website so a team member can help with your specific issue. If you need help outside of regular business hours, you can submit a request for support or visit the Help Center

How to apply for a personal loan with Zip

Applying for Zip financing starts with shopping.  

  1. Search the mobile app for a participating retailer, or visit an Exclusive Partner's website.
  2. Shop for your product and add it to your cart.
  3. At checkout, select “Pay with Zip.” If you are shopping in person, select the In-Store tab and add the order total, including tax and shipping.
  4. Review the finance terms, then select “Agree and continue.”
  5. Complete the transaction. Zip will automatically populate payment information for you. If you are paying in-store, add your Zip card to your wallet and tap to pay.

It is also important to note that when you initially make your purchase, Zip places an authorization of 25% of the purchase amount in order to confirm your purchase. 

Zip features and additional perks

With Zip, you can buy everything from clothing to food, education and travel. It works at many popular retailers you already use, like Amazon, Best Buy, Walmart, Target and eBay. Just look for the Zip logo when shopping online for easy checkout. If you prefer to shop in-person, you can access a digital Zip card to use. Zip even offers exclusive discounts at some retailers. If your purchase qualifies, it will automatically be added to your order. 

Account management is easy with mobile phone number and text message verification. You can log in to the Zip Customer Portal to check your account and make payments. To help, Advance notifications are provided before payments are taken so you always know when payments are due. Zip automatically takes the payment from the debit or credit card you have on file. 

Fees and penalties

Zip does not charge interest like other personal loan lenders. Instead, it charges a flat installment fee that varies by purchase. This fee ranges from $0 to $7.50 for each purchase. You pay $1.50 upfront as a prepaid finance charge when you make your initial payment. The remaining balance is split between your remaining payments. 

Rescheduling a payment may cost you up to $2 in fees, however. The first rescheduled payment per month is free, but a $2 fee applies thereafter. 

You also have the option to return your item to the merchant if you so choose. Once the merchant returns the funds to Zip, Zip then cancels your installment payments. Any installment payments you have made will then be refunded to you.  

Zip frequently asked questions

  • Zip does not work like traditional lenders who offer personal loans with fixed APRs, so there is no interest associated with Zip accounts. Instead, Zip charges an installment fee of up to $7.50 on your purchase. 

  • Zip only does a soft pull to your credit. This means that, unlike a hard credit check, it will not affect your credit report. However, you could be reported to collections should you neglect to make your payments in a timely manner. 

How Bankrate rates Zip

Overall Score 4.2 Explanation
Availability 5.0 Zip is widely available at popular retailers throughout the U.S., although it does not accept international payments.
Affordability 4.2 Instead of charging high interest rates, Zip skips the percentages and instead charges a flat rate.
Customer Experience 4.8 There is customer support available by phone seven days a week, with email support as an option as well.
Transparency 3.0 Although Zip offers a straightforward fee schedule, it does not disclose the details of its approval process, which can make it difficult for potential applicants to know where they stand.

Methodology

To select the top personal loan lenders, Bankrate considers 20 factors. These factors include credit requirements, APR ranges, fees, loan amounts and flexibility to account for a wide range of credit profiles and budgets. Bankrate reviewed over 30 lenders and gave each a Bankrate rating, which consists of four categories:

  • Availability: What the minimum loan amounts are, its eligibility requirements and loan turnaround are considered in this category.
  • Affordability: The interest rates, penalties and fees are measured in this section of the score. Lower rates and fees and fewer potential penalties result in a higher score.
  • Customer experience: This category covers customer service hours, if online applications are available, online account access and mobile apps.
  • Transparency: This category is measured by how accessible credit requirements, rates and fees are on the lender's page. We also took into account whether prequalification was available, as all these factors are key for consumers to make an informed decision.

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.