The 10-year Treasury yield hit its highest level since November 2023 on Sept. 2, 2026, touching roughly 4.82% intraday. That’s a bond-market headline until you notice who it dragged down with it. SoFi fell about 4% and Affirm fell about 5% as the yield climbed through the start of the month, and the mechanism connecting a Treasury auction to your BNPL app is more direct than it sounds. These companies borrow money to fund the loans you’re paying off in four installments. When yields rise, that borrowing gets more expensive. Eventually, that cost has to land somewhere — and it’s usually not the shareholders who eat it.

Affirm’s own executives have said as much before, in plainer terms than most companies use in public.

Quick Verdict

What happened	The 10-year Treasury yield hit its highest level since Nov. 2023 on Sept. 2, 2026, around 4.82% intraday
Stock reaction	SoFi fell ~4% to $17.14 and Affirm fell ~5% to $70.52 on Sept. 1 as yields climbed toward the multiyear high
Why BNPL stocks specifically	Higher long-term rates raise funding costs on the warehouse and securitization facilities balance-sheet lenders rely on
Affirm’s cost of funds	Fell to 5.8% in fiscal Q3 2026, down from 7.9% two years earlier — FY2027 guidance calls for take rates “broadly consistent” with FY2026, though Affirm’s own SEC filings still flag exposure to rising benchmark rates
Affirm’s Aug. 27 earnings	Revenue up 33% to $1.17B, GMV up 36% to $14.1B — demand is strong even as funding costs climb
Has this happened before	Yes. In 2022’s last funding squeeze, Affirm raised its max APR from 30% to 36% and considered higher merchant fees
Is your existing 0% plan at risk	No. A rate hike affects new financing offers, not payments you’ve already agreed to

Why Did Affirm and SoFi Stock Drop?

Start with the mechanics, because they explain everything else in this piece. Affirm and SoFi aren’t payment processors skimming a fee off transactions that pass through — that’s closer to how Robinhood makes money, and Robinhood’s stock held roughly steady during the same stretch, insulated because its transaction-fee model doesn’t depend on funding a loan book. Affirm and SoFi are lenders. They fund the loans on their books partly through warehouse credit facilities and partly by bundling loans and selling them off as asset-backed securities. Both of those funding channels get more expensive when long-term Treasury yields rise, because investors buying that debt want a higher return to compensate for holding it.

On Sept. 1, the 10-year yield climbed to 4.79%, surpassing the prior one-year high of 4.75%. SoFi dropped to $17.14, down about 4% on the day. Affirm dropped further, to $70.52, down about 5%. The next day, the yield pushed higher still, touching the highest level since November 2023. Affirm fell more than SoFi for a specific reason: its loan book skews toward shorter-duration consumer credit that revalues faster when rates move, so a rate shock shows up in Affirm’s numbers quicker than it does in SoFi’s more diversified mix of personal loans, student loans, and mortgages.

None of this is really new information — it’s the same mechanism that dragged mortgage rates higher the same week, just applied to a different kind of lender. Mortgage rates track the 10-year Treasury because mortgages are long-duration debt. BNPL funding costs track it because the securitization market that underwrites Pay-in-4 and installment loans prices off the same curve. Same yield, two different products, same direction of pain.

Affirm’s Earnings Show Demand Is Fine. Funding Is the Problem

Here’s what makes this squeeze interesting rather than alarming: Affirm’s business is not struggling. The company reported fiscal fourth-quarter 2026 results on Aug. 27, five days before the yield spike, and beat estimates across the board. Revenue rose 33% year over year to $1.17 billion. Gross merchandise volume rose 36% to $14.1 billion. Adjusted operating income hit $353 million, a 30% margin, and active consumers grew 21% to 27.8 million. People are using Affirm more than ever. That’s not the part under pressure.

What’s under pressure is the cost side of the ledger. Affirm’s average annualized cost of funds — what it pays to fund the loans on its books — fell to 5.8% in fiscal Q3 2026, down from 7.1% a year earlier and 7.9% two years before that. That’s been a genuine tailwind, driven by better execution in the asset-backed securities market and tightening credit spreads as the Fed cut rates through 2025 and into 2026. Affirm’s own fiscal 2027 guidance, delivered on that same Aug. 27 call, actually calls for take rates to stay “broadly consistent” with fiscal 2026 — CFO Rob O’Hare said the funding cost profile and mix the company has already locked in should carry through the new fiscal year. What hasn’t gone away is the underlying exposure: Affirm’s SEC filings warn that a portion of its funding arrangements carry variable rates, so a sustained climb in benchmark rates would still squeeze margins even though the company isn’t currently guiding for that outcome. Two years of declining funding costs was the tailwind behind Affirm’s margin expansion. Whether it keeps helping now depends on where Treasury yields go from here — not on anything Affirm has actually predicted.

Will BNPL Interest Rates Go Up in 2026?

Not immediately for existing plans, but the pressure to raise rates on new financing offers is real and Affirm has already told you how it responds when this happens. A few things worth knowing before your next checkout offer:

1. Existing plans don’t reprice. If you already agreed to a fixed APR or a 0% Pay-in-4 schedule, rising Treasury yields don’t change what you owe. The risk is entirely in new offers going forward.
2. Affirm’s rates on interest-bearing loans already range up to 36% APR, and the company has raised that ceiling before specifically to offset rising funding costs — it went from 30% to 36% during the last squeeze, in 2022 and 2023.
3. Merchant fees are the other lever, and they matter to you even though you never see them directly. When Affirm charges a retailer more to offer 0% financing at checkout, that cost tends to show up eventually in the price of the item, not as a line item you’d notice.
4. Watch for fewer 0% offers rather than a higher rate on the ones that remain. Lenders under funding pressure typically ration promotional financing before they touch the sticker APR on existing products — approval gets tighter, or the 0% window shrinks, before Affirm changes its published rate card.

Affirm Has Done This Before

This isn’t a hypothetical. The last time Affirm’s funding costs spiked this hard, in late 2022, Michael Linford — Affirm’s CFO at the time, now the company’s president — told Payments Dive the company was weighing higher consumer interest rates and higher merchant fees, specifically to hit its adjusted operating income profitability target. Linford’s read on consumer tolerance was blunt: a rate bump might mean “75 cents or $1 a month payment difference, which ends up being just noise in the eyes of the consumer.” Affirm followed through, raising its maximum APR on interest-bearing loans from 30% to 36%.

Rob O’Hare has held the CFO seat since November 2024 and now oversees merchant pricing directly. He hasn’t announced a rate increase for this cycle, and on the Aug. 27 earnings call he described fiscal 2027 take rates as “broadly consistent” with fiscal 2026, supported by the funding mix the company has already locked in. Read that as: the playbook exists, and it’s been used once already under conditions a lot like what a sustained yield spike could recreate — even though O’Hare’s own guidance doesn’t currently call for it. Nobody’s raised your rate yet. But the executive who’d have to make that call has already shown, on the record, what he does when funding costs turn against Affirm.

Is 0% BNPL Financing Going Away?

Not entirely, but it gets less generous under funding pressure. Zero-percent Pay-in-4 is typically subsidized by the merchant, not the lender’s own margin — the retailer pays Affirm or Klarna a fee to offer it as a sales driver, and that arrangement doesn’t disappear just because Treasury yields moved. What changes is how often it’s offered and to whom. When funding gets more expensive, lenders tend to tighten approval for 0% plans, shorten promotional windows, or push borderline applicants toward interest-bearing offers instead of the free option. If you’ve noticed 0% financing feels harder to get approved for than it did a year ago, rising rates are a plausible reason, not just tighter underwriting for its own sake.

If you’re comparing where to put a purchase right now, our Klarna vs. Affirm breakdown covers how each app’s fee structure and late-payment terms differ — worth checking before you assume 0% financing means the same thing at every checkout.

What This Means If You Have an Open BNPL Plan

If you already have installments running, this week’s Treasury move doesn’t touch your existing balance. What it should change is how you think about the next plan you open:

• Read the APR before you accept, not after. If a checkout offer isn’t 0%, the rate you’re shown reflects current funding costs — those numbers move with the market faster than they used to.
• Don’t assume the next 0% offer will be there when you’re ready to buy. Promotional financing is the first thing to tighten when a lender’s own borrowing costs rise.
• If you’re carrying BNPL balances into a rising-rate environment on top of thin cash reserves, that’s a bigger risk than the rate itself. Our look at BNPL’s overdraft data shows exactly who gets hurt when an automated installment debit lands on a stretched account — and rising rates on new plans don’t make that math easier.
• Check where you stand relative to a debt payoff plan, not just a single app’s balance. A tool that models everything you’re carrying across BNPL providers gives you a clearer picture than checking Affirm’s app in isolation.

This also isn’t the first time BNPL stock volatility has made headlines this quarter — Klarna’s own guidance cut in August rattled the sector before Treasury yields did it again in September. Neither event means a BNPL provider is at risk of failing. Both are worth understanding anyway, because the underlying story in both cases is the same: growth is fine, and the cost of money is what’s actually moving.

The Bottom Line

Affirm isn’t in trouble. Revenue is up a third year over year, GMV is up more than a third, and 27.8 million people used the product last quarter — none of that reads like a company that needs to panic. What’s true at the same time is that the cheap-money era that let Affirm’s cost of funds fall from 7.9% to 5.8% over two years is exactly the thing this week’s Treasury move is testing — even though Affirm’s own fiscal 2027 guidance still calls for costs to hold roughly steady. The company has already shown, in 2022, exactly what it does when that happens: raise the ceiling on consumer APRs, lean on merchants for more, and let the arithmetic work itself out on someone else’s checkout screen. Nobody’s changed your rate yet. But the executive who ran that playbook the last time it was needed still runs the company, and the yield chart that triggered it once is climbing again.

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10-year Treasury yield data from CNBC, Sept. 2, 2026. Affirm and SoFi stock movement from 24/7 Wall St. via Yahoo Finance, Sept. 1, 2026. Affirm’s fiscal Q4 2026 earnings and FY2027 guidance from Investing.com’s coverage of Affirm’s Aug. 27, 2026 earnings presentation. Cost-of-funds history from Affirm’s fiscal Q3 2026 shareholder letter, filed with the SEC. Michael Linford’s 2022 comments on consumer and merchant pricing from Payments Dive. Figures reflect data available as of early September 2026 — verify current rates directly with any BNPL provider before opening a new plan.