Klarna vs. Afterpay

Klarna gives shoppers more options

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Buy now, pay later (BNPL) apps let you get the merchandise you want without having to cover the full purchase price at checkout. Often, these services feature soft credit checks (which don’t hurt your credit) and a zero percent interest rate (which may help you save money over using a credit card). When comparing the apps on the market, you should pay special attention to things like rates, terms, and fees.

Both Klarna and Afterpay offer a similar four-payment buy-now-pay-later service that can help you get what you need or want today without having to pay the full amount at the time of purchase. But, if you need additional borrowing options or want access to a vast retailer network, Klarna is a better financing solution.

Klarna vs. Afterpay: Which Should You Choose?

Klarna


Klarna

Klarna

Pros
  • No interest charged

  • Large retailer network

  • Several repayment options

Cons
  • $10 minimum purchase requirement

  • $1600 borrow limit

  • Late and returned payment fees

Afterpay


Afterpay

Afterpay

Pros
  • No interest charged

  • Payment history not reported to credit bureaus

  • No minimum credit score required

Cons
  • Smaller retailer network

  • $35 minimum purchase requirement

  • Only available to U.S. users

At a Glance

  Klarna Afterpay 
Credit Limit Varies by user Varies by user 
Amount Due at Purchase  Pay in 4: 25% of the purchase price

Pay in 30: $0
25% of the purchase price
Repayment Terms  Pay in 4: 4 installments; 1 due at time of purchase; 3 due every 2 weeks over 6 weeks

Pay in 30: 1 installment within 30 days of purchase
4 installments; 1 due at time of purchase; 3 due every 2 weeks over 6 weeks
Interest  0% 0%
Credit Requirements  Not specified Not specified 
Credit Impact  Soft credit check

On-time payments not reported to the credit bureaus
Soft credit check

On-time payments not reported to the credit bureaus
Late Fees  Pay in 4: Up to $7

Pay in 30: None, but late payments get you banned from making future purchases
Up to $8
Number of Retailers  250,000 85,000 
Rewards Program  Available to all app users Exclusive, invitation only 

Klarna vs. Afterpay: Terms

Klarna’s Pay in 4 and Afterpay’s BNPL service are nearly identical. Here’s what they have in common:

  • Terms: 6 weeks
  • Installments: 4—1 due at time of purchase and 3 due every 2 weeks
  • Amount due at purchase: 25% of the order total
  • Credit limit: Varies by user for every transaction attempted

To use Klarna’s Pay in 4, you must spend at least $10, and the most you can borrow is $1,600. Afterpay doesn’t have a minimum spend requirement, but some retailers may impose one. Afterpay also doesn’t specify a maximum amount a user can borrow. 

Klarna also offers the Pay in 30 program, which lets you pay for your merchandise within 30 days without putting any money down. If you go this route, you’ll need to remit the entire balance due in one payment during that time frame.

Both Klarna’s Pay in 4 and Afterpay’s buy-now-pay-later service can help you buy an item you might not have the money on hand to purchase. Since you won’t have to pay for any items you return, Klarna’s Pay in 30 may be right for you if you’d like to try a product before committing to a purchase.

Klarna vs. Afterpay: Credit Requirements

Each time you attempt to make a purchase through the app, both Klarna and Afterpay will run a soft credit check which doesn’t get reported to the credit bureaus, so it won’t damage your credit score. Neither company specifies what credit score or income amount you need to get approved.

Besides a soft credit check, both apps consider:

  • How long you’ve been a customer
  • Your payment history with the company
  • How much you’re trying to borrow
  • How many orders you have open/how much you currently owe

Klarna and Afterpay require you to be at least 18 years old to use their BNPL services. Afterpay also stipulates that you must be a United States resident

When you make timely payments for an extended period, your chance of getting approved goes up. If you get declined, reducing your purchase amount or paying off open orders may help.

Neither company reports your payment history to the credit bureaus, which can be a good thing if you forget to or can’t pay. However, that means using the apps responsibly won’t help you improve your credit report or score, either.

Klarna vs. Afterpay: Interest and Fees

Klarna and Afterpay apps are free to download and use. Neither company charges interest on purchases, but there are some fees.

  Klarna Afterpay 
Late Fee Pay in 4: Up to $7

Pay in 30: None, but you lose the ability to open new orders

Extended financing: Up to $35
Up to $8
Returned Payment Fee  Pay in 4: Up to $25

Pay in 30: Up to $27

Extended financing: Up to $35 
None

Klarna vs. Afterpay: Mobile App

You can get both apps on Google Play or through the Apple App Store. You can also get the Klarna app by scanning a QR code on the provider’s website or requesting a download link via text message.

While Klarna easily bests Afterpay in terms of retailer network (250,000 stores compared to 85,000 stores), both apps offer similar functionality. You can use them to:

  • Browse the vendor directory
  • View special deals
  • Shop for items
  • Make and manage payments
  • Report a return to temporarily delay payments during processing
  • Get assistance from customer service

You can also see an estimated spending limit in both the Klarna and Afterpay apps (though it’s not a guarantee of order approval). 

Klarna vs. Afterpay: Other Products

In addition to its Pay in 4 and Pay in 30 options, Klarna offers extended financing for up to 36 months with an APR of 19.99% through WebBank. If you apply for this option, the company may run a hard credit check on you. Hard credit checks do get reported to the credit bureaus and could negatively impact your credit score. Your payment history may also get reported to the credit bureaus.

As of July 2021, Afterpay doesn’t offer additional financial products.

Final Verdict

Klarna and Afterpay are both leaders in the buy-now-pay-later industry. Each service offers a helpful four-payment option that allows you to work necessary (and discretionary) purchases into your budget. However, Klarna is a better choice if you’d like to “try before you buy” (via Pay in 30), finance a purchase over a longer term, or shop at a wider variety of retailers.

Frequently Asked Questions

How Do Klarna and Afterpay Work? 

Klarna and Afterpay work similarly. Both companies offer short-term financing solutions that let you get what you need now and pay for it over time (usually six weeks). Some borrowing options require a down payment, while others allow you to postpone all payments for up to 30 days.

Do Klarna and Afterpay Require a Credit Check? 

Both Klarna and Afterpay require a soft credit check for their buy-now-pay-later services. Soft credit checks don’t show up on your credit report and, therefore, won’t impact your credit score. However, if you apply for Klarna’s longer-term financing option, the company may run a hard credit check, which could affect your credit score.

Can You Build Credit with Klarna or Afterpay?

Unfortunately, you can’t build credit with Klarna or Afterpay. Neither company reports your payment history to the credit bureaus, so using the apps typically won’t have any impact on your credit (good or bad).

Methodology

We thoroughly researched Klarna and Afterpay’s buy-now-pay-later services, factoring in terms, fees, rates, borrowing options, and retailer networks. We also considered the type of consumer that would benefit most from using either app, ease of application, and other features like rewards programs or other banking options.