Airfordable lets you pay for travel over time
Flying is expensive.
So Airfordable is launching from Y Combinatorâ€™s Summer â€™16 batch to let you book flights and pay over time before you take off.
Hereâ€™s how it works:
Travelers find their preferred flight online (using any travel site they want) and upload a screenshot with their flight details.
Once you areÂ approved, the startup calculates a payment plan (up to 3 months) that starts with an upfront deposit and ends sometime before your flight takes off. And after your final payment Airfordable will email you a confirmed e-ticket for the trip.
One problem â€“ for this convenienceÂ the startup charges a pretty loftyÂ fee â€“ anywhere from 10-20%, depending on demand, the date of travel, and ticket price. Assuming a 3-month repayment period, a 20 percent feeÂ is essentially an insane 80% APR.
But thinking of the fee as an interest rate isnâ€™t exactly the right way to do it â€“ mainly becauseÂ a service like AirfordableÂ could mean the differenceÂ between someone being able to take a trip or not â€“ turning it into a priceless service. Ama Marfo, co-founder of Airfordable, echoes this sentiment when she explained that â€œthe fee is high for people that donâ€™t understand the valueâ€.
Plus,Â in return, the company doesnâ€™t check your credit score, meaning customers with poor or no credit could potentially be approved for a layaway plan.
So far the service has been used by about 10,000 people with a 95 percent repayment rate. This rate may be so high because the entire balance needs to be paid before you take the trip, unlike a credit card or loan service like Affirm. The upside to this is that a traveler doesnâ€™t have to be stuck paying for their trip months after they return from it.
If a traveler doesnâ€™t pay before their trip, their flight is canceled. But, all payments that they made after the initial deposit areÂ credited towards a future trip.
In the future, the company hopes to expand into layaway payments for vacation packages and hotels. They also are working on a custom travel search platform so users donâ€™t have to upload their own travel screenshots.
They also are working towards finding a financial institution to back their layaway plans â€“ as of now all flights are being purchased from the companyâ€™s operating funds.
Source byÂ techcrunch..