Klarna financing review
Buy now and pay later without interest — as long as you pay on time.
Klarna offers no-interest financing without fees or interest, as long as you fully repay your balance on time.
Though services like Klarna allow for helpful flexibility, there are risks — like the potential to rack up debt and pay a high interest rate if you miss a payment.
Klarna might be right for you if…
- You're confident you can make four monthly payments before late fees kick in.
- You need to buy something pricey but don't have a credit card.
- You need to make a big purchase and don't want to max out your credit card.
Klarna might not be a fit for you if…
- You aren't sure whether you can make the four monthly payments.
- You want to build your credit — it doesn't report on-time payments to credit bureaus.
Klarna has been accredited by the Better Business Bureau (BBB) since 2015 and has an A+ rating, which means it has a history of responding to and closing customer complaints. However, an average of 200 customer reviews on the BBB average out to only 1 out of 5 stars, with many complaints pointing to poor customer service. Shoppers also complained about technical issues with the website and being charged unnecessarily for products.
The company fares much better on Trustpilot, with 4.3 out of 5 stars compiled from over 23,500 reviews for an overall Excellent rating. Customers compliment the efficient, streamlined process and easy-to-use website. Others, however, had similar complaints about customer service issues.
How does Klarna work?
Klarna partners with retailers to offer third-party financing solutions. If a store offers Klarna, you'll see the option to select Klarna at checkout.
The service offers three payment structures:
- Pay in 4: Pay for your purchase in four installments, every two weeks. You'll make the first payment at checkout.
- Pay in 30 days: You won't make an initial payment when you purchase your item. You'll have 30 days to cover the balance without paying interest.
- Financing terms of six to 36 months: Pay for pricier purchases over six to 36 months, with monthly payment installments.
How does Klarna make money?
Klarna is able to keep its lights on in a few ways:
- Fees for merchants. To offer it as a payment method at checkout, retailers have to pay Klarna. This usually involves a setup fee, a monthly fee and a cut of every transaction.
- Late payment fees. If you don't pay on time, Klarna charges you $7 for every late payment deadline you miss.
- Interest on late payments. If you don't pay off the balance by the end of your billing month, Klarna starts charging you 19.99% interest on average.
What payment methods can you use to pay Klarna installments?
Klarna accepts all major debit and credit cards, including Mastercard, Visa, Amex and Discover. However, it doesn't accept prepaid cards.
Klarna pros and cons
Klarna can help you buy something you require immediately but need another paycheck or two to come up with the funds. However, if you don't pay on time, you'll be charged penalty fees plus interest.
- You'll pay zero interest or fees if you make the payments on time.
- It's available at thousands of popular retailers, including Etsy, Sephora and Macy's.
- Get exclusive deals and rack up points with its rewards program, Vibe.
- Pay in 4 and Pay in 30 won't help build your credit.
- 20% APR kicks in after a month
- $7 late payment fee
Does Klarna check your credit?
Yes. When you apply for an account with Klarna, it performs a soft credit check that will not impact your score. However, if you're interested in using Klarna's six to 36-month financing option, you'll go through a hard credit check which will show up as an inquiry on your credit report.
Can Klarna help my credit?
Not if you're using the Pay in 4 payment plan. It may help your credit if you use Klarna for six to 36-month financing since that's an actual loan through WebBank. But if your goal is to build your credit score, starting with a secured credit card may be the better choice.
Is Klarna safe?
Klarna's buyer protection policy ensures your goods arrive in the condition described at purchase. If you have a problem with your order, report it so Klarna can make it right.
Klarna stores and transmits your personal and financial details securely both on and offline. And its zero-fraud liability protects you from unauthorized or fraudulent purchases that end up on your account.
How to get approved for Klarna
You must be at least 18 years old and shop with a retailer that offers Klarna to sign up for an account.
If your purchase is eligible, you'll see Klarna listed as a payment option at checkout. Select Klarna and complete the short application on the next page. You'll know instantly if you're approved for financing.
To use Klarna's app, create an account online with your email or download the app on your mobile device.
What credit score do I need for Klarna?
There isn't a minimum credit score required for Klarna. In fact, it's possible to get approved for Klarna even without a credit history since it only performs a soft credit pull when you apply for its payment plan.
The only time you'll be charged a fee to use Klarna is if you miss a payment. The late payment fee is $7 for every deadline you miss. If you haven't covered the balance by the end of the billing month, then you'll be charged interest.
Klarna interest rates
The Annual Percentage Rate (APR) on standard purchases is 19.99%. However, you can dodge this interest as long as you repay your balance before the expiration date. Typically, Klarna payments are due on the 26th of each month.
Klarna customer service
Here's how to get in touch with Klarna's customer service team:
- Phone. Call 844-552-7621 weekdays from 8 a.m. to 11 p.m. ET.
- Live chat. Use the live chat tool on its website — it's open 24/7.