Shoppers who want multiple options for BNPL should consider Klarna. This app offers Pay in 4 financing with no interest or fees, as long as you pay on time, while also offering loans up to 24 months when you need extra time to pay off your purchase. While there is a soft credit check, your credit score will not be affected by Klarna's Pay in 4 loans as long as you make all of your payments on time.
Klarna's app allows you to create a wish list of your favorite products and will notify you if a price goes down. Customers can shop at over 450,000 retailers online or through the app and create virtual card numbers to use at other U.S.-based stores. Klarna shuttered its shopping rewards program in June, 2024 and replaced it with a cashback program linked to Klarna's "balance" account.
Pros Explained
- No interest on Pay in 4 financing. With Klarna's Pay in 4 financing, you will not pay any interest on your purchases. The interest-free loans make it easier for customers to spread their payments out over time without paying interest on a credit card. However, if you want to use its longer-term financing, you may be charged interest on those loans.
- Offers multiple ways to finance purchases. In addition to Pay in 4 lending, Klarna also offers interest-free Pay in 30 loans so you can try out items, return what you don't like, and pay for what you keep. It also offers longer-term loans ranging from six to 24 months that allow you to keep your monthly payments lower.
- Create virtual card numbers for other stores. You can create virtual card numbers that can be used just like a traditional credit card. Each virtual card purchase has its own payment plan that is managed online or through the Klarna app. Klarna also offers a physical Visa card.
- Set price alerts in the app on your saved items. For items you like, but aren't yet ready to buy, you can set price alerts in the app so that you'll be notified if they go on sale or the price drops. This feature helps you save money on the items you like the most.
Cons Explained
- Requires a soft credit check. To open an account with Klarna, there will be a soft inquiry on your credit report. This will not affect your credit score, but it may mean that some potential customers could be declined for poor credit or a thin credit history.
- May report missed payments to credit bureaus. While Klarna does not report positive repayment of its Pay in 4 loans to the credit bureaus, if you miss payments and fall behind, it may negatively affect your credit score.
- Charges late fees. While Klarna does not charge interest on its Pay in 4 loans, it will charge late fees if you miss a payment.
How It Works
Shopping with Klarna can be done online, through the app, and at participating stores. Your spending limit and ability to shop are determined by Klarna's soft credit inquiry, your personal information, and your Klarna purchase history.
When you make a purchase, you can choose one of four financing options:
- Pay Now
- Pay in 4
- Pay in 30 days
- Pay over time (from 6 to 24 months).
Pay in 4 is a 0% interest option that requires a 25% down payment at the time of purchase, then three equal, biweekly payments for the balance. Pay in 30 loans give you time to try out your items, return what you don't want, and pay for the rest in one lump-sum payment. The longer-term loans require monthly payments until the balance is paid in full.
The mobile app lets you view your purchase history, track your shipments, and process returns.
Account holders can create a wish list of items for future purchases or to share with friends and family for gift ideas. The app provides notifications if the price drops on any item on the wish list.
Interest and Fees
Klarna does not charge interest on its Pay Now, Pay in 4, and Pay in 30 day loans. As long as you make your payments on time, you'll never pay more than your original purchase price. If you pay late, there is a late fee, however, the Klarna website does not clearly disclose its late fees. The six- to 24-month payment plans charge interest between 7.99%-33.99%.
Approval Process
To get started with Klarna, you'll first need to download the app and create your account. During the signup process, Klarna will perform a soft credit inquiry to confirm your identity and determine your spending limit. This soft inquiry will not affect your credit score, nor will it appear on your credit report.
While setting up your account, you'll provide basic details like name, email, address, and phone number. Additionally, you'll add banking information for your payments to be withdrawn when you take out a loan.
Mobile App
Klarna users can browse and shop for items through the Klarna mobile app. It is available for both Apple and Android mobile devices. You can view your purchase history, track deliveries, view previous and upcoming payments, and change your payment method.
The mobile app offers new deals daily and includes exclusive discounts for Klarna users at over 500,000 retailers. Users can create wish lists of their favorite stores and products to save for later and share with friends and family looking for gift ideas. You'll also be alerted whenever there are discounts or price drops on your favorite items.
Save money by creating a wish list of your favorite items and be notified whenever there's a discount or price drop.
You can use Klarna's Pay in 4 financing at other retailers, as well. Simply create a virtual card number in the Klarna app, or use the physical Klarna card, and you can spread out payment of your purchases as if you were shopping through the app.
Customer Service
If you have a customer service issue, there are multiple ways to contact Klarna's customer service team 24 hours a day, seven days a week. Online chat is available through the Klarna website or you can send a message through the Klarna app. You can even call customer service at 844-KLARNA1 (844-552-7621).
Customer Satisfaction
Klarna is rated highly on online rating websites. As you would expect, the company has its share of negative reviews and complaints, just like any other financing company. Klarna typically replies to negative reviews within two business days and has replied to almost 90% of its negative reviews.
Its app receives overwhelmingly positive reviews from both Apple and Android mobile device users. It has a rating of 4.8 stars in the Apple App Store and a 4.6 rating in the Google Play store.
Klarna makes it easy to contact customer service the way they want to. Customers can chat online, send a message through the app, or call customer service 24 hours a day, seven days a week. Having the ability to contact customer service at all hours of the day or night makes it easier to resolve issues and improve customer satisfaction.
Other Services
In addition to its Pay in 4 and other payment plans, Klarna also offers several banking-like services:
- Klarna balance: A cash account where you can keep your cashback awards and product return refunds. You can also transfer funds into your balance account. Balance funds can be used to make purchases using Klarna.
- Klarna card: The Klarna card is a Visa card that allows you to pay for purchases using Pay Now, Pay in 30, or Pay over time, but via a credit card instead of the app. There are no foreign transaction or annual fees.
- Klarna cashback: Klarna users earn up to 10% cashback on purchases made via the app at any of hundreds of stores. Cashback earned is deposited into the user's Klarna balance account.
Klarna vs. Affirm
Klarna and Affirm are two of the buy now, pay later apps that offer longer-term financing on customer purchases. While Pay in 4 financing is gaining popularity, many customers cannot afford to pay off their purchases within six weeks. Longer-term financing options—up to 24 months for Klarna and 48 months for Affirm—enable customers to spread out their payments over many months to make the payment amounts more affordable.
Affirm may be better for some users because shoppers may qualify for 0% financing over longer repayment periods than Klarna offers. Affirm customers may also use The Affirm Card to split the repayment of purchases over $100 into four easy installments.
| Klarna | Affirm | |
|---|---|---|
| Credit Limit | Varies | Varies |
| Amount Due at Purchase | Varies by loan type | As low as $0 |
| Repayment Terms | Pay in 4: 25% every 2 weeks Pay in 30: Due in full within 30 days Six to 24 months: Equal monthly payments | Varies by loan type |
| Interest | 0%-33.99% | 0% to 30% |
| Credit Check Required | Pay in 4: Soft credit check Pay in 30: Soft credit check Six to 24 months: Soft credit check | Varies by loan type |
| Minimum Credit Score | Not available | Not available |
| Late Fees | Yes | None |
| Other Financing Products | Pay in 30 days with no interest Six- to 24-month financing Virtual card numbers | Virtual card numbers The Affirm Card Affirm Savings Account |
The Bottom Line
Klarna offers attractive buy-now, pay-later financing for its customers. It charges no interest or fees on its Pay in 4 and Pay in 30 loans as long as all payments are made on time. Plus, it offers other payment options if you need more time to pay your balance in full. Users can shop online, through its app, or in-person with a virtual or Visa Klarna card.
The company does perform a soft credit inquiry for new applications, but this will not affect your credit. It does not report to the credit bureaus as long as your account is in good standing. Because Klarna performs this soft credit inquiry, potential users with bad credit or limited credit history may not get approved.
How We Rate and Review Buy Now, Pay Later Apps
We researched publicly available information about the Klarna buy now, pay later app from its website, mobile apps, and other relevant sources. Data points on interest rates and fees, credit limits, repayment terms, credit requirements, app features, and more were gathered to write this review. Our review focuses on the features we consider most important to potential users as they consider BNPL services to finance their purchases. This information is updated regularly to ensure that readers can make an informed decision when financing their purchases.
