Klarna Buy Now, Pay Later Review
Klarna is a buy now, pay later (BNPL) platform that can help you break up purchases into easier-to-manage chunks.
- Several plans to choose from: Klarna offers several financing plans to choose from: Pay in 4 installments, Pay in 30 days and financing from 6 to 24 months.
- Low (or no) down payments: With the exception of Pay in 4 and Pay in Full, you won’t have to put any money down to purchase an item. When using Pay in 4, you’ll need to pay 25% of your purchase up front.
- You can use it almost anywhere: Klarna issues one-time virtual cards so you can shop anywhere that accepts Visa.
- Often 0% interest, but beware of fees: Pay in 4 and Pay in 30 days are 0% interest, but Klarna charges a late fee of up to $7 if you miss a payment.
- No hard credit checks: Klarna can be easier to qualify for because it only runs a soft credit check to determine your eligibility.
- Extra benefits with a $7.99 monthly subscription: With Plus membership, you can unlock exclusive discounts with popular brands like Nike and Sephora. Membership also comes with a physical card that can help you earn 1% cashback when you use Klarna to pay in full.
- Best for paying no interest, as long as you can avoid temptation: If you don’t qualify for a 0% intro APR credit card, Klarna could be a good substitute since many of its payment plans are interest free. That said, Klarna is easy to use and can lead to impulse spending.
Klarna pros and cons
The idea behind buy now, pay later is similar across companies, but each has its own unique perks and drawbacks. Here’s what we found during our Klarna review.
Pros
- No interest on Pay in 4 and Pay in 30
- Instant credit decisions
- No hard credit checks, ever
- AI chatbot can help, no matter what language you speak
Cons
- Late fees can stack up quickly
- Won’t know how much Klarna will allow you to spend until checkout
- May find yourself in over your head if BNPL is not used responsibly
- Sometimes charges service fees when using a one-time virtual card
With instant credit decisions and 0% interest, Klarna can make your purchases more affordable by spreading the cost across several smaller payments.
Klarna and other BNPL apps can lead to overspending. There’s no limit to how many Klarna loans you can have out at once, and taking out more than one means juggling. If the money isn’t available when Klarna attempts to deduct it through autopay (a requirement), it will charge a $7 late payment fee. Your bank may also charge you an overdraft fee. Klarna also warns late payments can go to collections.
Although you can use a one-time card anywhere that accepts Visa, not all retailers partner with Klarna. Klarna charges a service fee when you buy from a non-partner retailer, and on some gift card purchases. You can skip these charges with a Klarna Plus membership for $7.99 a month.
Klarna financing options
According to LendingTree’s monthly tracker, 41% of BNPL users say they’ve been late on a BNPL payment at least once this year. If you’re considering Klarna, understanding the company’s financing options could be crucial to avoiding a debt cycle.
| Klarna BNPL option | Financing term | Due at time of purchase | Next payment due | Interest While Klarna may give you 0% financing, Klarna warns that failing to pay on time could mean late fees or collections. | Fees |
|---|---|---|---|---|---|
| Pay in 4 | 6 weeks | 25% of the total amount | 25% required two weeks later, and in two week increments thereafter | 0% | $7 late payment fee, and total fees cannot exceed 25% of purchase amount |
| Pay in 30 | 30 days | $0 | Total amount required 30 days after merchant confirms your order | 0% | $7 late payment fee, and total fees cannot exceed 25% of purchase amount |
| Pay over time | 6 to 24 months | $0 | One month after the store processes your payment and then on the same day each following month | 0.00% – 35.99% | $7 late payment fee, and total fees cannot exceed 25% of purchase amount |
| Klarna Card | Depends on payment plan you choose | $0 | On the 16th of each month | 0% except for Pay over time, in some cases | $7 late payment fee and cannot exceed 25% of outstanding balance |
Klarna requirements
To use Klarna, you must meet the requirements below:
- Age: Be at least 18
- Residency: Be a U.S. citizen with the legal capacity to enter into a contract
- Administrative: Have a bank account, the ability to receive texts and a Social Security number may be required
Klarna does not have a minimum credit score requirement. Instead, Klarna performs a soft credit check each time you use it to pay. Klarna will then approve or deny your purchase based on your credit history, spending habits, employment stability and other factors.
Because Klarna runs a new soft credit check on every purchase, you might be creditworthy for some items but not others. Someone with a lower score may be able to use Klarna to buy a $100 item but not $1,000.
Due to company guidelines, you can’t use Klarna for some purchases, including:
- Utility bill or rent payments
- Governmental agencies
- Medical care
- Gambling (online or in-person)
- Drugs or alcohol
As a BNPL company, Klarna may not be right for your borrowing needs. If that’s the case, a personal loan could be a more suitable option. Be sure to shop around for a lender that helps you meet your financial goals and can offer you the best-fitting rates, terms and amounts.
How to finance with Klarna
Signing up for Klarna
Download the app or apply online
You can apply for Klarna through its website or on the mobile app. Then, you’ll be prompted to create an account. Here, you’ll provide some basic personal information along with your payment details (either a debit, credit or checking account).
Start shopping
You can start shopping once you’ve signed up. If you want to save on fees, limit your only choices to stores that partner with Klarna. You can do this by shopping through Klarna’s website, mobile app or browser extension. Otherwise, you can make a virtual card and use Klarna wherever Visa is accepted.
To see how much you’re tentatively approved to spend, check your purchase power while logged in online or on the mobile app (tap your profile). Klarna will also show you your estimated purchase power when you make a virtual card.
Pay using Klarna
Online shopping
When you’re ready to check out, choose “credit card” as your payment option. If the retailer partners with Klarna, click the pink “Klarna” badge. The app or web browser will then prompt you to choose a payment plan (Pay in 4 or Pay in 30, for instance).
If the store partners with Klarna, you can choose your payment plan. If it doesn’t, you will have to make a one-time virtual card online or on the mobile app. Once you’ve created the card, key in the credit card number as if it were an ordinary card.
In-store shopping
You can use Klarna for in-store shopping as long as your cellphone has a digital wallet, such as Google Pay.
First, click the “in-store” button on your mobile app. Then, choose the store you’re shopping at. The app will guide you to make a digital card, which you will add to your digital wallet. When checking out, bring up your digital card and tap to pay.
Choosing Klarna’s Pay over time payment plan requires a few extra steps. Follow the same procedure detailed above, but choose Pay over time as your payment option. Then, pick your financing terms (including your interest rate and repayment timeline) and fill out the application. Once completed, you’ll get an instant credit decision.
Pay your first Klarna bill
Your payments are automatically withdrawn from the account you connected to the Klarna mobile app. You can pay early, though, with no prepayment penalties. To do so, navigate to the “payments” tab on the app and follow the prompts.
How Klarna compares to other BNPL companies
Even if you believe Klarna aligns with your payment preferences, it never hurts to shop around and research the best BNPL sites and apps. Here’s how Klarna stacks up.
| Klarna | Cash App Afterpay | Affirm | |
|---|---|---|---|
| Minimum credit score | No minimum credit score | No minimum credit score | No minimum credit score |
| APRs While these apps may give you 0% financing, failing to pay on time could result in late fees or your debt going to collections. | 0.00% for Pay in 4 0.00% for Pay in 30 days 0.00% – 35.99% for Pay over time | 0.00% for Pay-in-4 0.00% – 35.99% for Pay Monthly | 0.00% for Pay in 4 0.00% – 36.00% for monthly installments |
| Loan amounts | No set minimum or maximum | No set minimum or maximum for Pay-in-4 $100 – $10,000 for Pay Monthly | $50 – $20,000 |
| Repayment terms | Six weeks for Pay in 4 30 days for Pay in 30 days 6 to 24 months for Financing | Six weeks for Pay-in-4 3 to 24 months for Pay Monthly | 6 weeks for Pay in 4 3 to 60 months |
| Late fees | $7 (cannot exceed 25% of purchase) | Up to $8 (cannot exceed 25% of purchase) | None |
| Funding timeline | Instant | Instant | Instant |
| Customer service | 24/7 chat and phone help | Available daily, can only contact via web form | Available daily via phone, and Monday through Friday via chat |
| Bottom line | Klarna has the most payment plan options of these lenders | Cash App Afterpay doesn’t have a customer service phone number, which could be frustrating if you need help right away | Affirm could be best for large purchases since it offers loans up to $20,000 |
Frequently asked questions
Yes — overall, Klarna is trustworthy. It was founded in 2005 and has served millions of customers around the world.
However, the BNPL model is no stranger to controversy. BNPL apps are very easy to use and can lead to overspending. According to our most recent data, 48% of BNPL users have regretted buying something with BNPL.
Many BNPL companies (including Klarna) only perform a soft credit check for most types of financing. Soft credit checks don’t negatively impact your credit score — however, if you default on your loan, some BNPL apps report that to the credit bureaus, likely driving down your credit score.
Klarna reports payments to the credit bureaus if you use Pay over time, but not for other payment plans. It only reports to TransUnion and as of this writing, what it reports won’t impact your credit score.
Like with any personal finance option, Klarna may be a good idea for some, but not for others. BNPL may not be inherently bad, but you could end up in a debt cycle if you repeatedly finance small-dollar items. Check out some BNPL alternatives before deciding if Klarna is right for you.
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