- Warning: Late repayments can cause you serious money problems. For help, contact the government’s free money advice website, MoneyHelper.
Many of your favourite shops will offer payment through Klarna – a scheme that allows you to slice up your payments over time or wait up to 30 days to make your first payment.
You can check out our full list of retailers offering Klarna here.
How does Klarna work?
Klarna partners with a huge range of brands like boohoo, ASOS and PrettyLittleThing. When you shop with one of these stores, you can select Klarna as your payment method at the checkout. In 2021, Klarna updated its checkout wording to make it clearer that it’s a credit product and to highlight what happens if you miss payments.
In the UK, Klarna doesn’t charge any interest on its “Pay in 30 days” or “Pay in 3 instalments” plans. But the service’s “Financing” option is more like a credit card, and this does charge interest (representative APR 18.9% variable). You can find out more about each plan below.
Klarna offers 3 payment structures for delaying payments for those who want to pay via Klarna. In 2022, Klarna will offer a “Pay Now” option as well. The following are the 3 current options:
- Pay in 30 days. This is a credit option that allows you to complete your order without paying. After your goods are shipped, you’ll receive an invoice with up to 30 days to pay the full amount.
- Pay in 3 instalments. This credit option allows you to spread the cost of your purchase equally over 2 months. It requires an affordability assessment (not a full credit check) and no interest is charged. Payments are due first at the time of ordering, and then 30 and 60 days later.
- Financing. This is a regulated financial service and it allows you to split your payments into monthly instalments over 6-36 months. Like a loan or a credit card, it requires a full credit check and can charge interest, which currently has a representative APR of 18.9%. At the checkout, you can choose the term of the finance deal and you’ll be told how much interest will be payable – retailers have the option to offer different deals. You have to pay at least the minimum amount each month (if you only pay the minimum, though, this will increase the total interest amount). Your monthly statement will show an “interest-saver” amount and paying this will keep you on track to repay your purchase within the originally agreed deal. Your credit score can be impacted by the Financing option.
How to use Klarna: Step-by-step video
Features of shopping with Klarna
- No annual fee. You’ll never pay a maintenance fee to use Klarna.
- Zero-interest options. If you choose “Pay in 30 days” or “Pay in 3 instalments”, you’ll pay no interest on your purchase.
- Autopay. You can set up automatic minimum payments from your bank account to your Klarna account.
- Secure. Klarna has an anti-fraud protection policy. If you see an unauthorised purchase with your account, report the problem to Klarna and the company says it will make it right.
- Easy-to-use app. Manage your payments, report and manage returns and chat with customer service 24/7 from your smartphone.
- Payment reminders. Klarna gives you a nudge 2 days before each payment is due.
- Refunds. Request a refund for your order and receive your money within 14 days.
How much does Klarna cost?
You pay no annual fees to use Klarna, but there is interest to pay on the Financing option. For this, you’ll be told the terms of the finance deal, including any interest payable, upfront. The highest APR rate on Financing is 18.9%. Retailers may offer different APR rates, but they’ll never be more than 18.9%.
Is Klarna safe?
Klarna stores and transmits your personal and financial details securely both online and offline. It has a Fraud Protection Promise that states it will work with you to investigate if you report suspicious activity or a fraud attempt.
“Where this investigation confirms that you have been a victim of fraud…rest assured that Klarna shall not expect you to pay for the fraudulent purchase,” it continues. There is an exception if Klarna believes you’ve acted negligently – for example, by not properly protecting your account information or personal information.
Klarna’s Buyer Protection Policy states that your dispute is with the retailer and details how to log any issue with a product in the Klarna app or online. Klarna says it can pause your payment due date while you work out a solution with the retailer.
The buy now, pay later (BNPL) sector faces being regulated; ahead of this, Klarna launched its own Complaints Adjudicator. Customers can request an “impartial review” relating to “Pay in 30 days” or “Pay in 3 instalments” issues if they feel their complaint wasn’t properly handled.
How do I sign up for Klarna?
You must be at least 18 years old and shop with a retailer that offers Klarna at checkout to sign up for an account. All you need to do is select “Klarna” at this stage and complete the short application on the next page. You’ll know instantly if you’re approved for one of these plans or not.
To use Klarna’s app, create an account online with your email or download the app on your mobile device.
Which shops offer Klarna?
You can browse the full list of Klarna retailers here.
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What other features does Klarna offer?
Klarna unveiled Vibe in the US in June 2020, a customer loyalty scheme and the first of its kind in the BNPL sector. It may come to the UK eventually, but there’s been no announcement on the timing of this.
Vibe is a no-fee scheme that applies to all purchases made through the Klarna app or when using the service through a retail partner. In the US, members earn 1 Vibe point per dollar spent, which translates into redeemable gift cards for brands such as Starbucks and Uber.
“The program is designed to reward customers who spend responsibly. Members will only earn ‘Vibes’ once their payments are complete and paid on time, without the penalty of fees or interest often associated with credit card loyalty programs,” says Luke Griffiths, UK general manager at Klarna.
We spoke to Klarna commercial director Russ Carroll about why it’s different
Is Klarna easy to use?
Finder’s BNPL expert Amelia Glean answers
1. Seamless checkout experience
The process is quick and easy to follow. Once you’ve navigated to the checkout on a retailer’s website, you need to select your Klarna repayment method (choose between credit options “Pay in 30 days” and “Pay in 3 instalments” or “Financing”, which is the finance option). Once you’ve done this, enter your email address and shipping details. At this point, you’ll know if you can use the service or not.
Klarna runs a soft credit check on you if you’re applying for a credit option (“Pay in 30 days” or “Pay in 3 instalments”) to determine if you will be able to pay the money back. This doesn’t affect your credit rating. If you’re applying for “Financing”, Klarna might perform a credit check with a credit reference agency. This credit check will show up as an inquiry on your credit report and might impact your credit score.
Once approved by Klarna, you’ll receive confirmation of your repayment plan by email. Be sure to set reminders for these repayment dates (although Klarna will also send you email reminders and push notifications if you’re using the app to jog your memory should you forget). If you’re declined, it’s worth getting in touch with Klarna to find out why.
2. Range of plans to choose from
If you’re looking to shop online and try something on before you buy, you can opt for the interest-free “Pay in 30 days” option. This gives you ample time to get your item delivered, try it on and return it before the money even comes out of your account. If you like the item and want to keep it, you can pay Klarna back before the 30-day deadline. The “Pay in 3 instalments” plan may suit some shoppers better. The money is taken automatically from your linked account and can work better for those on a weekly budget. Other shoppers may prefer to pay for larger ticket items via Klarna’s Financing option. Be sure you understand all the terms and conditions if you choose this option, though – you may be charged interest and it could affect your credit score.
3. A cracking app
Use Klarna regularly? Chances are you’ll benefit from downloading the Klarna app. It’s easy to navigate when it comes to managing payments, but there are more advanced features, too. These include up-to-date deals from retailers, wish-list tabs and a spending tracker to keep on top of your outgoings all in one place. But the best feature? You can shop with your favourite retailers in the Klarna app itself, which saves a load of your precious time!
What happens if I make a late payment?
If you do find you’re struggling to meet your payments, you might be eligible to snooze your payment due date for an interest- and fee-free 10 days. If you’re not eligible and can’t pay, contact Klarna as soon as possible. Missed payments mean your Klarna account will be stopped and you won’t be able to make any other purchases.
If you’ve chosen the “Pay in 3 instalments” credit option and find that you can’t make your first payment, Klarna will get in touch and then try 2 more times to take the money. If you still can’t pay, it will roll over into your next instalment. Again, you’ll be informed if the next payment fails, giving you time to add money to your account. After 2 more attempts, Klarna will then roll the payment over into your third and final instalment. If you still can’t pay, Klarna will contact you to see if you can use another payment method or refer you to a debt collection agency. If you’re having debt problems, you can contact the government-backed service MoneyHelper for free support.
Klarna says your credit score will not be impacted by using Klarna’s pay later credit products, even if you have failed to pay on time. But, if you pay late on the Finance option, this can end up damaging your credit score. There have never been any late fees for “Pay in 30 days” or “Pay in 3 instalments”, and in October 2021, Klarna scrapped late fees for its Financing option – but missing these payments will damage your credit score, and ultimately, you may be chased by debt collectors.
What can I do if something goes wrong?
In most cases, your experience with Klarna will run smoothly. But on the off chance that you encounter a problem, check out Klarna’s list of frequently asked questions. Can’t find your question on there? Chat online with a member of the customer services team or call 020 300 50833.
How many shoppers use Klarna?
Klarna is the most popular BNPL app in the UK. Finder’s latest report on BNPL, Instant hit: The rise and rise of buy now, pay later, showed the Swedish platform achieved more downloads of its app (986,000 downloads) between January and July 2020 than any other BNPL app in the UK. My Argos Card (435,000) came in second with not even half the number of downloads in the same time period.
Klarna customer reviews
Klarna has a large number of online reviews. On Trustpilot, the brand scores 4.5 out of 5 stars based on over 19,500 reviews, with a rating of “Excellent”, as of November 2021.
It’s a similar story for the Klarna app. On Google Play, there are over 300,000 reviews, and the brand receives a score of 4.6 out of 5 stars. On the App Store, Klarna gets 4.9 stars out of 5, as of November 2021, based on over 115,000 ratings.
Pros and cons of Klarna
- Most popular BNPL platform in the UK
- Easy to use, with 3 different payment options to choose from
- Customer reviews are overwhelmingly positive
- The Financing option could negatively affect your credit rating
- It’s so easy to use, it can be tempting to spend more than you have and get into debt
Our verdict: Is Klarna any good?
Klarna is the most popular BNPL platform in the UK. It’s slick, easy to use and fun – but it has also come in for criticism for making it easy to get into debt.
The platform covers mindful spending to discourage shoppers from over-using it, but some shoppers have spent more than they could afford. As always, make sure you’ve read and understood the small print before you sign up, and only use Klarna’s services if you’re sure you can pay the money in time.
There are 3 different BNPL plans to choose from, including an option that allows you to “try before you buy”. Klarna has partnered with just about any retailer that offers a BNPL option at checkout, and you’ll pay no interest on its “Pay in 3 instalments” or “Pay in 30 days” plans. Using these is pretty straightforward and can work well for shoppers who can repay on time.
Have more questions about Klarna?
Check out our frequently asked questions
How can I contact Klarna?
Does Klarna do a credit check?
Yes, depending on the option you select. Klarna will do an affordability assessment (soft credit check) if you choose its “Pay in 3 instalments” or “Pay in 30 days” credit options. It will conduct a full credit check if you choose its “Financing” option. Please remember that full credit checks can negatively affect your credit score.
How do I return an order?
Contact the retailer you purchased your item from and follow its returns policy.
All returns are subject to the retailer’s return policy. If you have a specific concern or dispute, contact Klarna’s customer service.
Where do I go to manage my payments?
Log in to your online Klarna account or use the mobile app to view and manage your open payments.
Where can I shop with Klarna?
Klarna is available as a payment method at almost 3,000 stores and is even available at dental offices, tattoo parlours and driving instructors. You can see a full, updated list of shops and services that offer Klarna here.
Is Klarna only 4 payments?
No, Klarna has 3 payment options: “Pay in 30 days” (one payment 30 days after purchase), “Pay in 3 instalments” (3 equal payments) or “Financing” (split your payment into multiple repayment depending on your financial circumstances).
Why has Klarna stopped accepting my orders?
Klarna runs affordability checks on customers (and full credit checks if you opt for the “Financing” option) before accepting orders. If your financial status has changed recently, Klarna may not allow you to make orders. Klarna will also reject any future orders from customers who have missed payments on previous orders until those payments have been made.
Is Klarna the same as Clearpay?
Klarna and Clearpay are both buy now, pay later services that allow shoppers to split their online shopping totals into small payments. But, Klarna and Clearpay work quite differently, with Klarna offering 3 payment options, including a traditional financing option, and Clearpay offering just 1 payment option of 4 equal payments.
How do I set up a Klarna account?
You can either set up a Klarna account directly on Klarna’s website or by downloading the Klarna app. You can also choose Klarna as the payment method at your favourite retailer and you will be redirected to Klarna’s account creation page from there. You’ll need to enter information including your phone number and email address as well as selecting a payment method for Klarna to take your future payments from.
Will I be accepted for Klarna?
For Klarna’s “Pay in 30 days” and “Pay in 3 instalments” credit options, Klarna runs “affordability checks” before accepting orders. For its “Financing” option, Klarna will run a full credit check before accepting a customer’s order. If Klarna finds you are likely to be able to afford repayments and have repaid any previous Klarna orders on time, you’re likely to be accepted for your order.
Is Klarna trustworthy?
Klarna began business as a bank in Sweden and so has all the proper licences and protections of a licensed financial institution. This makes it safe to use Klarna as a payment method.
Does Klarna ever increase my credit limit?
Yes, Klarna’s credit limit increases depending on your repayment status and how long you’ve been a customer at Klarna. The more orders you successfully pay back to Klarna on time, the higher your future credit limit will be.
Is Klarna legit?
Klarna is one of the most popular buy now, pay later services in the world and is a legitimate payment method.
Can you be declined for Klarna?
Yes, Klarna does not accept 100% of orders. Klarna will run an affordability check on you before accepting your first order and will take into account previous Klarna orders when deciding on your future credit limit and whether you’re allowed multiple orders at once.
When does Klarna take its first payment?
If you choose the “Pay in 30 days” credit option, Klarna will not take any money at the time of ordering. If you choose the “Pay in 3 instalments” credit option, Klarna will take the first of these 3 payments when you confirm your order. If you choose Klarna’s “Financing” option, then Klarna will take the first of however many payments you decide on when you confirm the order.
Sensor Tower, July 2020
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