Klarna review: Flexible payments for online shopping

Learn about Klarna's buy now, pay later plans, including no-interest options.

Klarna

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 load of great retailers like boohoo, ASOS and PrettyLittleThing. When you shop with one of these stores, all you need to do is select Klarna as your payment method at the checkout, and you’re all set!

In the UK, Klarna doesn’t charge any interest on its “Pay in 30” or “Pay in 3” instalment 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 three payment structures:

  • Pay 30 days later. 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. This allows you to spread the cost of your purchase equally over two 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 an option that 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 – representative APR 18.9%, variable. At the checkout, you can choose the term of the finance deal and you’ll be told then 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 the “Pay 30 days later” or “Pay in 3” options, you’ll pay no interest on your purchase.
  • Autopay. 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 two days before each payment is due.
  • Refunds. Request a refund for your order and receive your money within 14 days.
  • Warning: Late repayments can cause you serious money problems. For help, contact the Money Advice Service.

How much does Klarna cost?

You pay no upfront costs or annual fees to use Klarna. With the Financing option, 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 which says 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 has a Buyer Protection Policy which sets out that your dispute is with the retailer and 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.

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.

boohooboohoo
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John Greed JewelleryJohn Greed Jewellery

Up to 80% off in the John Greed Jewellery sale

MissguidedMissguided
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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 space. There are also plans for this feature to launch in the UK in 2021.

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 one Vibe point per dollar spent, which translates into redeemable gift cards for great brands including 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

amelia expert comment
Klarna offers multiple BNPL plans to suit most people, but in terms of user experience, what is Klarna really like?

1. Seamless checkout experience

The process is quick, clean 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 “Pay in 30 days”, “Pay in 3” or “Financing”). Once you’ve done so, 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 to determine if you will be able to pay the money back. If you’re approved, 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 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 later in 30 days” option. This gives you ample time to get your goods 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” 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.

3. A cracking app

Use Klarna regularly? Chances are you’ll benefit from downloading the Klarna app. This is 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?

Klarna will automatically try to collect payment for your purchase from the debit or credit card you entered at checkout. If this doesn’t go through on the scheduled due date, Klarna will make one further attempt to automatically collect payment two days later. If this attempt also fails, Klarna will issue you a statement for the full outstanding order amount, which will become payable 15 days later.

Customers will be notified when a payment is due two days before Klarna attempt to collect it, but it’s good to know that your credit score will not be impacted by using Klarna’s “Pay later” products, even if you have failed to pay on time. If you pay late on the Financing option, this can end up damaging your credit score.

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 FAQs. 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 the most 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 at second with not even half the number of downloads in the same time period.

Klarna was the most downloaded BNPL app in Jan-July 2020, at 986,000 downloads.

Klarna customer reviews

Klarna has a large number of online reviews. On Trustpilot, the brand scores 4.3 out of 5 stars based on over 12,500 reviews, with a rating of “Excellent”, as of November 2020.

It’s a similar story for the Klarna app. On Google Play, there are over 205,000 reviews, and the brand receives a score of 4.3 out of 5 stars. On the App Store, Klarna gets 4.9 stars out of 5, as of November 2020, based on over 50,000 ratings.

Bottom line

Klarna is the most popular BNPL platform in the UK. It’s slick and easy to use, and the latest updates to the app make it a colourful, fun place to do your shopping or manage your payments.

The platform covers off mindful spending to discourage shoppers from over-using it, but it has come in for criticism because 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 repay the money in time.

All in all, Klarna is the UK’s number one BNPL platform for a reason. There are three different BNPL plans to choose from, including an option that allows you to “try before you buy”. It’s partnered with just about any retailer that offers a BNPL option at checkout, and you’ll pay no interest on its “Pay in 3” or “Pay in 30 days” plans. Using these and paying on time is pretty straightforward and can work well for shoppers.

Have more questions about Klarna?

  1. Sensor Tower, July 2020

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