Personal Loans
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Klarna Buy Now, Pay Later Review

Updated on:
Content was accurate at the time of publication.

Klarna is a buy now, pay later (BNPL) platform that allows consumers to finance everyday purchases.

Many online businesses and brick-and-mortar retail stores offer Klarna at checkout as a way to break down your purchase into smaller payments. The company also offers a one-time-use card that you can use at any online retailers that accept prepaid Visa cards. Klarna works primarily through a free mobile app or web browser extension.

  • Several plans to choose from: Eligible borrowers have up to four financing plans to choose from: Pay in 4 installments, Pay in 30 days, financing up to 24 months and the Klarna Card.
  • Low (or no) down payments: With the exception of Pay in 4, borrowers don’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.
  • Can be used almost everywhere: Klarna issues one-time virtual cards so you can make online purchases anywhere that accepts prepaid Visa.
  • Almost always 0% interest: Other than the Finance option, all plans require interest-free payments. However, be aware of fees if you miss a payment due date.
  • Usually no hard credit checks: Klarna typically only runs a soft credit check to determine your eligibility. However, it may require a hard check for its monthly financing option.
  • Some benefits require a fee: You’ll have to pay $4.99 a month to use the Klarna Card. Klarna Plus (an optional loyalty program) costs $7.99 a month.
  • Klarna rewards and mobile app: Klarna users can rack up points for retailer discounts through its rewards program. The Klarna mobile app also has a comparison shopping platform to help you find the best deals.
  • Best for digital-savvy borrowers with less-than-stellar credit and disciplined spending habits: If you aren’t comfortable using a mobile app or browser extension, Klarna could be frustrating. Otherwise, shoppers who can restrain themselves from overspending and don’t qualify for a 0% intro APR credit card might want to give Klarna a try.

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.

ProsCons

  No interest on most plans

  Instant financing approval

  No hard credit check for most types of financing

  Late fees can stack up quickly

  Borrower requirements and credit limits aren’t transparent

  May find yourself in over your head if BNPL is not used responsibly

  May charge service fees

With its instant financing approval and 0% interest, Klarna can make your purchases more affordable by spreading out the cost across several smaller payments. But be careful — if you make multiple Klarna purchases and fail to pay on time (every time), you may be overwhelmed by multiple $7 late payment fees.

Note that Klarna may require a service fee when using the app or card to finance purchases — one of the benefits of Klarna Plus is waived service fees. However, those fees are not transparent.

As our economy struggles, more Americans are turning to BNPL. If you’re considering Klarna, understanding the company’s financing options could be crucial to avoiding a debt cycle.

Klarna BNPL optionFinancing termDue at time of purchaseNext payment dueInterestFees
Pay in 46 weeks25% of the total amount25% required two weeks later, and in two week increments thereafter0%$7 late payment fee, and total fees cannot exceed 25% of purchase amount
Pay in 3030 days$0Total amount required 30 days from purchase or shipping date0%$7 late payment fee, and total fees cannot exceed 25% of purchase amount
FinancingUp to 24 months$0End of the month or on the same day each month (borrower’s choice)0.00% - 33.99%Up to $35 for late and returned payments for borrowers using Klarna as revolving credit
Klarna Card*6 weeks$025% of total purchase due on the second Friday of each month0%$4.99 per month and $7 late payment fee

*Only available for select borrowers already using the Klarna platform.

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U.S. citizens that are at least 18, have a bank account and can receive texts may be eligible for Klarna. Applicants must also have a “positive credit history.” Other than that, requirements are vague.

For most types of financing, the company performs a soft credit check. Many borrowers with fair or good credit might be approved for Klarna — at least for small dollar purchases.

Every time you use Klarna, it evaluates your eligibility based on your Klarna payment and borrowing history. You might be creditworthy for some items but not others. For example, you could be approved to finance a $150 pair of sneakers but not a $1,000 patio furniture set.

Due to company guidelines, you can’t use Klarna for some purchases, including:

  • Bill or rent payments
  • Gift cards
  • 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.

Download the app or browser extension

To apply for Klarna financing, first you need to download the Klarna 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

Once you’re signed up, you can start shopping. The mobile app and browser extension will display your Purchase Power (your estimated spending limit). Your Purchase Power will fluctuate based on your Klarna history, where you’re shopping and the financing option you choose.

You can shop directly through the Klarna mobile app, on your desktop and in person at participating brick-and-mortar retailers. You can find a list of retailers on Klarna’s website or mobile app.

Pay using Klarna

Online shopping

When you’re ready to check out, choose “credit card” as your payment option. If Klarna is available, you should see a “pay with Klarna” option.

Once you’ve hit “pay with Klarna,” the app or web browser will prompt you to key in the amount you’d like to finance and to choose a payment plan (Pay in 4 or Pay in 30, for instance). Then, Klarna will create a “ghost card,” a one-time-use virtual card for you to make your purchase.

In-store shopping

You can use Klarna for in-store shopping as long as your cellphone has Google Pay or Apple Pay.

First, click the “in-store” button on your mobile app. Then, key in the amount you’d like to spend with Klarna. The app will then create a ghost card that you’ll need to add to Google or Apple Pay. When checking out, select the ghost Klarna card in Google Pay or Apple Pay and pay as normal.

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Applying for Klarna Financing


Using Klarna Financing instead of the Pay in 4 or Pay in 30 options requires a few extra steps. Follow the same procedure detailed above, but choose Klarna Financing 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 approval 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.

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.

How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
KlarnaAfterpayAffirm
Minimum credit scoreNo minimum credit scoreNo minimum credit scoreNot specified
APRs0.00% for Pay in 4

0.00% for Pay in 30 days

0.00%-33.99% for Financing
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 amountsNo set minimum or maximumUp to $600 for new customers

Starting at $400 for Pay Monthly
$50-$20,000
Repayment termsSix weeks for Pay in 4

30 days for Pay in 30 days

Up to 24 months for Financing
Six weeks for Pay-in-4

6 to 12 months for Pay Monthly
3 to 60 months
Late feesVaries by plan (Up to $7 late fee per missed installment, not to exceed 25% of your amount due for Pay in 4)Up to $8 (cannot exceed 25% of purchase)None
Funding timelineInstantInstantInstant
Customer service24/7 chat and phone helpAvailable daily, can only contact via web formDaily chat and phone help
Bottom lineKlarna has the longest repayment terms of these lendersAfterpay has confusing late fee rulesAffirm has no late fees, but remember that missed payments will affect your credit score

Yes — overall, Klarna is trustworthy. It was founded in 2005 and according to the company, it’s served 150 million consumers at 500,000 merchants in 45 countries.

However, the BNPL model is no stranger to controversy. BNPL apps are very easy to use and eligibility requirements are loose. A 2022 LendingTree survey found that 70% of BNPL consumers say they’ve spent more than intended than if they’d paid for their purchases up front.

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, Klarna may report that to the credit bureaus, likely driving down your credit score. Further, most BNPL companies don’t report on-time payments — so if you’re looking to build credit, you may want to explore other options.

Like with any personal finance option, Klarna may be a good idea for some, but for not 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.