Klarna, a popular buy now, pay later (BNPL) app, offers users multiple ways to get what they want while making payments over time that align with their budget. Although a Klarna loan is interest-free and doesn’t impact your credit, the company charges late and returned payment fees. If you’d prefer not to pay fees, or you want to build your credit, you may want to look at other borrowing options.
- Pros and Cons
- Key Takeaways
Interest-free purchases for some repayment plans
Special perks through the Vibe rewards program
24/7 customer service available
Soft credit checks for Pay in 4 and Pay in 30 options
Credit score requirements not specified
Purchase approval not guaranteed, even if approved in the past
Late and returned payment fees may apply
Doesn’t help you build credit
- Klarna offers three different repayment options: Pay in 4, Pay in 30, and Financing.
- You can shop directly through the app, on retailer websites, and in stores.
- You can increase your chance of purchase approval by responsibly managing your Klarna account.
- Credit Limit Pay in 4: Varies by user, but up to $1,600; Pay in 30: Varies by user, no maximum specified
- Amount Due at Purchase Pay in 4: 25% of the purchase price; Pay in 30: $0
- Number of Installments Pay in 4: 4 (includes down payment); Pay in 30: 1
- Interest 0%
- Credit Check Required Yes (soft)
- Minimum Credit Score Not specified
- Reports On-Time Payments to Credit Bureaus No
- Late Fees Pay in 4: Up to $7; Pay in 30: $0 (but can’t make additional purchases)
- Other Financing Products Financing for 6-36 months
- Company Website www.klarna.com/us/
Klarna is a free BNPL service that offers three payment options to suit various needs and budgets. We reviewed the repayment terms, customer service, approval process, and more to help you determine if Klarna is the right option.
Using a BNPL app is easy and convenient, but it’s crucial to stay within your means and borrow responsibly.
In 2005, the company was founded in Stockholm, Sweden, but it’s currently headquartered in Columbus, Ohio. The buy now, pay later company boasts 250,000 retail partners and 90 million customers across 17 countries. You can shop through the app, on store websites through a Chrome extension, or in-person using a virtual Visa card.
How It Works
When you shop with Klarna, you can finance purchases you want to make using two different BNPL options: Pay in 4 and Pay in 30. Both feature interest-free transactions where you only pay for the items you keep (meaning you won't be liable for merchandise you return). You can shop and manage your account through the company’s mobile app.
Here’s how they compare:
|Pay in 4||Pay in 30|
|Credit Limit||Varies by user||Varies by user|
|Repayment Terms||4 installments
1 due at checkout
3 due every 2 weeks for 6 weeks
Due within 30 days of purchase
|Down Payment Required||Yes, 25% of the order amount||No|
With Pay in 4, your balance due gets divided into four equal installments. You’ll have to put 25% down at checkout, which is your first payment. Then, you’ll make the remaining three payments over the next six weeks.
With Pay in 30, you can shop online. No down payment is due at checkout, but you’ll have to pay off the entire balance within 30 days.
Pay in 4 is Klarna’s flagship service. It may make sense to select this method if you need a little extra time to pay for something you know you want. Since you don’t have to put any money down, Pay in 30 could be a great option if you'd like to try a product before buying it (e.g., clothing).
If you need more time to pay off a larger purchase, you may want to look into Klarna’s financing program through WebBank. Here are some of the most important details:
- Loan term: 6-36 months
- Minimum credit line: $300
- Annual percentage rate (APR): 19.99% (unless lower promotional rate applies)
- Late fee: $35
- Returned payment fee: $35
To obtain this financing, you’ll have to apply for it. As part of the application process, WebBank reserves the right to check your credit report, which could result in a hard inquiry and impact your credit score.
You’ll receive a decision on your application instantly. Neither Klarna nor WebBank discloses income, employment, or credit score requirements.
To qualify for financing, you must be a United States resident and of legal age to enter a credit agreement (18 in most states) and have a credit card. The service provider doesn’t disclose income or credit score requirements and will assess your eligibility to make a purchase every time you initiate a new order.
To determine your creditworthiness, Klarna will do a soft credit check and review internal factors like:
- Your payment history with the company
- The amount you’re trying to borrow
- The number of orders you have with a balance
In general, the longer you’ve used the app responsibly, the easier it will be to get approved and borrow larger amounts. If one of your transactions gets declined, Klarna encourages you to reduce the amount you’re trying to borrow or pay off any outstanding orders.
Interest and Fees
Klarna does not charge hidden fees on its services or interest on its Pay in 4 and Pay in 30 transactions. However, if you pay late or your payment gets returned, you may be subject to the following fees:
- Pay in 4: Up to $7
- Pay in 30: None, but you will get banned from placing additional orders
Returned Payment Fee
- Pay in 4: Up to $25
- Pay in 30: Up to $27
Klarna’s fees are middle of the pack as compared to other BNPL options. For example, PayPal Credit charges up to $40 if you pay late, but Affirm doesn’t charge a fee at all. However, with 0% interest, shopping with Klarna may be cheaper than using your credit card.
Mobile App: Robust Capabilities
Klarna’s free mobile app is available on Google Play and in the Apple App Store. You can also scan a QR code on the company’s website or request a download link to get sent to you via text message. Through the app, you can:
- Browse through the company’s store directory
- See recommended deals
- Monitor pricing on the items you want to purchase
- Shop for and buy goods securely
- Track your orders
- Manage payments
- Report returns (which will pause and adjust your payments due)
- Get help from customer service
Klarna’s app also lets you earn and redeem rewards through the Vibe rewards program. Once you sign up for the program and make your first purchase with Klarna, you’ll receive a $5 Amazon gift card. After that, you’ll get one Vibe point for every dollar you spend, which you can put towards perks from major brands like Starbucks, Best Buy, and Sephora.
Customer Service: Multiple Resources
If you need assistance, you can reach out to Klarna’s customer service team in several ways:
- Phone: (844)-552-7621 (representatives available Monday-Friday 8 AM to 6 PM ET)
- Email: customersupport@Klarna.com
- Online chat (available 24/7, but you must log in to your account before speaking to an agent)
- Mobile app via direct messaging
Klarna’s website also features an extensive library of frequently asked questions, so you may be able to get the support you need there.
Customer Satisfaction: Overall Positive
Klarna’s reputation is generally positive. Most customers are pleased with the flexible payment options offered and the customer service received. However, some users expressed frustration due to being declined for credit or experiencing transaction processing errors.
Based on online reviews, it appears the company responds quickly to complaints and tries to resolve each issue.
If you need longer-term financing for larger purchases, Klarna has a partnership with WebBank. If approved, your credit line will be at least $300, and you can spread payments out over 6-36 months at 19.99% APR.
Klarna doesn’t share eligibility requirements for this option on its website, but the company may do a hard credit check to gauge your creditworthiness.
A hard credit check will show up on your credit report and may lower your credit score.
How Klarna Compares to Other Buy Now, Pay Later Apps
Like many buy now, pay later services, Klarna offers interest-free, short-term financing with only a soft credit check. The company stands out for providing multiple payment options, including longer-term financing and a generous rewards program. But does the lender stack up against competitors like Afterpay?
Klarna vs. Afterpay
Klarna and Afterpay are both BNPL apps offering a four-installment, 25% down payment, interest-free buying option. While the companies share some similarities, there are also some key differences:
- Klarna has partnerships with 250,000 stores while Afterpay has 85,000 vendors in their retailer network.
- Klarna offers three different buying options whereas Afterpay only offers one.
- Klarna’s rewards program is available for all users, but Afterpay’s is by invitation only.
While Afterpay is a solid buy-now-pay-later solution on its own, Klarna provides customers with a more robust and customizable shopping experience.
Read our full Afterpay review.
|Number of Payment Options||3||1|
|Size of Retailer Network||250,000||85,000|
|Amount Due at Purchase||25% (for Pay in 4 option)||25%|
|Interest Rate||0% - 19.99%||0%|
|Credit Check Required||Yes, soft||Yes, soft|
|Late Payment Fee||Up to $7 (for Pay in 4 option)||Up to $8|
|Rewards Program||Available to all users||By invitation only|
Klarna offers three different options to spread out payments on a purchase over time. Shopping with Klarna is convenient because you can do it through the app, in person, or with a Chrome browser extension.
Loyal and responsible app users get rewarded with a higher chance of transaction approval, an increased credit limit, and special perks through the Vibe rewards program. However, there is the potential for late fees and a higher interest rate on longer-term financing than some of its competitors.
Klarna can be a good solution if you run into an unexpected expense that you can’t cash flow now but can pay off in the time allotted. You may also want to use the app to rack up rewards on purchases you would make anyway.
All of our reviews of buy now pay later companies are based on extensive research and analysis of each company’s credit options, fees, and overall availability. To rate Klarna, we developed a buy now pay later app review methodology that compares credit options offered, repayment terms, interest rates, mobile app features, and borrower requirements to help us provide insights into user experience.