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Klarna Review: Buy Now, Pay Later Shopping

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Klarna is a financing platform that allows consumers to buy now and pay later. It lets you pay via installments, delayed payments and extended financing. It’s easy to use when buying from box stores as well as luxury and boutique brands.

This Klarna review will cover how the service works and whether it’s a good fit for you.

Klarna review summary: Pros and cons

Customers won’t have to pay interest on the four-payment planLow borrowing amounts
No prepayment, annual or membership feesCharges returned payment and late fees
Multiple finance avenues consumers can take advantage ofTo qualify for longer financing terms, you may have to go through a hard credit check

Klarna: How it works

Klarna is a financing service that allows you to shop from a variety of retailers without an upfront payment. Klarna offers three buy now, pay later options:

  • Interest-free installment plan
  • Pay in 30 days
  • Financing of 1 to 18 months

Klarna isn’t a bad idea for borrowers with bad credit, either. Approval for the installment, 30-day payment options and monthly financing is based on soft credit checks. This may be good news for those whose credit needs some fine tuning as they can skip the hard credit inquiries, even for the monthly financing options.
Klarna credit terms

Klarna credit terms

APR0.00% - 19.99%
  • 0.00% - 19.99%
Annual fee
  • None
Minimum spending limit
  • $10
  • Returned payment: Up to $25
  • Late payment: Up to $7 per missed installment
  • Over-the-limit charge: No fee

  • The installment plan (“Pay in Four”): Under the installment plan, you pay off your purchase in four equal payments. You will be charged a quarter of the price when the item ships, and then again every two weeks until the purchase is paid off. When you sign up, you give your debit or credit card information, and your installments are paid automatically.
  • Pay in 30 days: Klarna’s option to pay in 30 days lets you purchase an item and decide whether you like it before you pay for it. Provided you pay within the 30 days, you won’t pay any fees or charges on top of the purchase amount. If you return the item before the 30 days is up, you can note that in the Klarna app to avoid being charged.
  • Monthly financing: The Klarna credit plan works similarly to a traditional personal loan. Six-month financing options are available at fixed payments, interest rates and due dates upon approval of a credit application. Klarna offers monthly financing terms up 1 to 18 months.

How to qualify

Klarna can be a good option if you have bad credit, particularly if you want the six- to 36-month financing plan. The company only runs soft credit checks when customers request an installment or pay in 30 days’ plan, which means they verify basic information (like your age) but don’t report the inquiry to the major credit bureaus. This way, consumers can also avoid temporarily dinging their credit score.

If you have a moderate to good credit score and credit history, you might qualify for one of these plans. However, approval depends on your creditworthiness and how much you are trying to spend. Klarna doesn’t list spending limits on its site, but it can deny requests based on how much you want to borrow, and being approved once doesn’t guarantee you’ll be approved in the future.

Where you can use Klarna financing

The good news about Klarna financing is that you can use it at a broad range of retailers, such as H&M and Overstock, along with other recognizable stores listed below. Klarna stores include several jewelers, mattress brands, a motorized scooter company and others.
Merchants with Klarna financing

Merchants with Klarna financing

Abercrombie & FitchCallaway ApparelHot TopicOverstock
Abercrombie & FitchCallaway ApparelHot TopicOverstock
Agent ProvocateurCyclogenic BikeKendall + KyliePerry Ellis
Après JewelryDish NetworkLenovoPrettyLittleThing
BearPawGood AmericanMicrosoftSerena Williams
BoseHollisterNasty GalVaio

You can also use Klarna at big-box stores, though these don’t appear on the website. When you use the Klarna app, you’ll find links to Amazon, Target and Walmart, among other big-name retailers.

Keep in mind, though, that Klarna may not be the best option for those stores. Some of those brands offer their own branded cards with special financing promotions and rewards, so compare offers before deciding how to pay.

The Klarna mobile app

The Klarna app seems made for younger consumers — think colorful, minimal aesthetics and a tutorial that plays like an Instagram story. But the ease of use makes buy now, pay later shopping accessible for users of any age. Sign-up takes just a few minutes and requires your name, address, email and phone number (you’ll need to verify the last two before you can use the app).

Once you’re set up, the shopping tab of the app lets you browse stores or view Daily Deals offered by merchants. You can also create new ghost (payment) cards directly from the app.

The Klarna app is available through the Apple App Store and Google Play Store.

How the Klarna one-time card works

To pay with Klarna, you create a Klarna one-time card that functions the same as a standard debit or credit card. You input the amount you want to use on the card and Klarna generates a virtual Visa card with a card number, expiration date and CVV code.

Unlike a debit or credit card, however, once you activate the card, you must use it within 24 hours. After 24 hours, the card will expire.

Each card has a one-time use; you create a new one each time you shop through Klarna. If you sign up for Klarna credit financing, you will not receive a physical card; all of your credit line information will be available through the app.

How Klarna compares to competitors

APR0.00% - 19.99%NoneNone0.00% - 30.00%
TermsBiweekly installment plan, pay in 30 days or financing of 1 to 18 monthsDepends on your employer’s pay cycleSplit into four payments, one every two weeksFour payments – one every two weeks and loan terms of three, six or 12 months
Credit checkSoft Pull-credit checkSoft PullSoft PullSoft Pull-credit check
FeesReturned payment fee up to $25 and late payment fee and late payment fee Up to $7 per missed installmentNoneLate fees Up to $8 (cannot exceed 25% of purchase)Not specified


Unlike some buy now, pay later websites, Perpay does not run a credit check but instead relies on your pay stub to qualify you for financing. This may make it easier for bad credit borrowers to be approved than with Klarna since Klarna performs soft credit checks.

After making a purchase, payments are automatically withdrawn from your paycheck. Perpay users can buy from more than 1,000 brands, including big names like KitchenAid, Apple, Nintendo and Goodyear.

Perpay is more accessible for borrowers with bad credit, but Klarna offers more financing options. And with Klarna’s four-payment installment plan, you pay after your item ships. Perpay shoppers have to wait until their first payment is withdrawn for their items to ship.


Like Klarna, Afterpay offers a four-week installment payment plan for a range of recognizable and boutique brands, including Levi’s, Ray-Ban and Bed Bath & Beyond.

Also similar to Klarna, Afterpay installments are paid every two weeks, nor does it charge interest or fees, except in cases of late payments. Should you miss a payment, Afterpay can charge Up to $8 (cannot exceed 25% of purchase) in late fees.

While Afterpay customers can skip the credit inquiries and interest rates, Klarna offers more of a variety when it comes to payment plans.


Like Klarna, Affirm offers consumers a wide variety of payment plans, including the four-part payment plan paid every two weeks and loan terms of three, six or 12 months. Affirm performs soft-credit inquiries, no hard-credit checks, so your credit will not be impacted when opening an account with them.

While Klarna’s financing terms are much longer than Affirm’s options, Affirm doesn’t charge its customers any type of fees, including late fees.

Once you’re approved to use Affirm, you’ll have access to financing products from retailers such as Peloton, Dyson and even Gucci.

Read our full review of Affirm to learn more.


Is Klarna trustworthy?

Yes — Klarna is a company that’s been around since 2005 and is based out of Stockholm. Klarna also keeps your banking and login details secure and confidential, even from merchants, and it assumes the risks on consumers’ payments.

Is Klarna bad for your credit?

Klarna only performs soft-credit inquiries when you apply for an account. Soft-credit checks are not reported to the credit bureaus and will not impact your credit. However, Klarna may report any missed payments or payment defaults to the credit bureaus which may impact your credit.

How does Klarna handle returns and refunds?

When you return items purchased through Klarna, you submit the request through the original merchant and then report the return via the Klarna app.

  • If you receive a partial refund and are on the installment plan, Klarna will apply the credit equally across your remaining payments, if the refund is less than the remaining balance. If your refund is greater than the remaining balance, the credit will be deducted from your remaining amount while the difference will be refunded to your original payment method.
  • Consumers who chose the pay in 30 days’ option will receive updated invoices showing the reduced balance. Those who have a financing plan will see a lower balance on their overall amount owed but will make payments as usual until the account is paid off.

In the case of full refunds, payments are credited back to your original payment method.

What happens if you default on your Klarna loan?

If your payment account has insufficient funds or you’re late on your payment, Klarna may use a debt collection agency to pursue repayment, report your default account to credit bureaus which can impact your credit profile and disallow you to use Klarna’s services.


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