Klarna Buy Now, Pay Later: 2024 Review | Bankrate (2024)

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At a glance

Best for nonspecific purchases

Klarna is best for borrowers who want to finance a purchase at the point of sale. Your initial loan amount range will be based on your application information and, with positive repayment history, your maximum loan amount could increase.

Do you qualify?

To use Klarna, you must:

• Be at least 18 years of age.
• Be a resident of the U.S. or one of its territories.
• Have a positive credit history.
• Have a valid credit or debit card and bank account.
• Purchase an eligible item.

Klarna vs. PayPal

Unlike Klarna, PayPal's pay-in-four option has a maximum limit of $1,500. However, if you have multiple small purchases you want to finance then PayPal may be the better option. PayPal also offers the benefit of no late fees with its pay-in-four option.

Klarna vs. Affirm

Affirm and Klarna are both well known in the BNPL space, having been in business for over a decade. Both offer in-store options alongside their online ones, and offer similar services.

Where Klarna stands above is in the types of plans it offers. Klarna has two plan options, whereas Affirm only offers one. Affirm, on the other hand, has a higher average app rating across the App Store and Google Play.

What we like and what we don’t like

What we like

• Multiple payment options: Rather than just a single 0 percent payment plan, Klarna offers both a pay-in-four and pay-in-30 option. Outside of its two 0 percent options, Klarna also offers personal loans with terms up to two years.
• Access to a rewards program: There is a free rewards club through Klarna that gives one point for every dollar spent using Klarna. Points can be redeemed for discounts and offers at certain stores.
• Partners with popular stores: From Nike to Instacart, Klarna partners with a number of popular stores that offer a variety of goods. Whether you're looking for clothes, beauty supplies, electronics or more, you'll likely be able to pay with Klarna.

What we don’t like

• Late fee may apply: If you're late on your payment, you may owe $7. If you miss more than one payment, the late fees can add up — though it's limited to 25 percent of the original purchase amount. You may be able to extend your payment once by up to seven days.
• Doesn't help you build credit: As with many BNPL options, using this type of financing won't help you build credit. Your on-time payments are not reported to any credit reporting agencies. However, your late payments may be reported.
• Limited information available: Due in part to its approval requirements varying on a highly individual level, Klarna doesn't provide information on exact financial requirements, or how small of a loan can be taken out.

How to contact Klarna

Klarna can be contacted 24/7. You must have a Klarna account to contact customer support by chat. Once you do, you can choose to chat or call with a customer support agent.

How to take out a loan with Klarna

To start a payment plan with Klarna, you will need to follow four steps.

Klarna features and perks

Klarna's rewards program is free and awards points for every eligible purchase. Its reward structure allots one point for every $1 spent on eligible purchases. The app also offers a $5 welcome reward upon signing up for the program. These points can then be used to score discounts, deals and offers at a participation store of your choosing.

Fees and penalties

A late fee of up to $7 will be charged for each missed payment, and won't exceed 25 percent of your order value.

Methodology

The Bankrate team did a complete analysis of the features and services offered by the most well-known buy now, pay later apps in the industry. Then our experts developed a scoring system to rate these apps, focusing on three main areas:

• Availability: We look at the minimum and maximum loan amounts offered by the apps, as well as the number of interest-free plans they offer. Apps offering more than one interest-free plan and those with the most flexible loan amounts rank higher in this category.
• Affordability: We evaluate the APR ranges apps assess on purchases once the interest-free period ends. Additional fees, exclusive perks and discounts are also rated. Apps with the lowest APRs, fewer fees and more perks obtain the highest scores in this category.
• Customer experience: Purchasing flexibility, as well as return, exchange and refund policies are vetted in this section. Mobile app rating, number of consumer complaints with the CFPB and customer support are also taken into account. Apps with more flexibility and lower complaints rate higher in this category.

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