Klarna Buy Now, Pay Later: 2023 Review

Klarna offers "buy now, pay later" payment plans for online and in-store purchases at popular retailers like Macy’s, Wayfair and Sephora.

It's similar to companies like Zip and Sezzle, which also provide short-term loans at checkout for zero interest.

Though NerdWallet recommends paying for something outright whenever possible, BNPL plans may make sense for buyers purchasing a necessary item, as long as they can comfortably afford the payments.

Klarna at a glance

How does Klarna work?

Klarna offers a pay-in-four payment plan, which lets shoppers split their purchase into four equal installments to be paid every two weeks, with the first due at checkout.

For example, if your purchase costs $200, you would pay $50 at checkout. The three remaining $50 payments would each be billed to your debit or credit card every two weeks until you’ve paid the full $200.

Installments are interest-free, but the company charges a late fee once your payment is 10 days overdue. The late fee is either $7 or 25% of the installment, depending on which is less. After two failed attempts to acquire payment, Klarna will also pause your account, so you can’t continue using the service.

There's no penalty for making a payment early or paying off your balance in full before the final due date.

Klarna offers other financing options besides its Pay in 4, including an interest-free Pay in 30. With this plan, instead of paying at checkout, shoppers have 30 days after the item ships to pay for their purchase. This plan allows online shoppers to try out items before they have to pay anything, according to the company.

Klarna also offers a traditional loan option, which is available at select retailers and includes repayment terms up to two years. These loans may charge interest up to 24.99% APR.

Should you use Klarna?

Klarna is a reputable provider of BNPL loans. However, BNPL loans can lead to overspending, so NerdWallet recommends using them only to help pay for an essential expense. Make sure to read Klarna’s terms carefully before agreeing to the loan.

Klarna may be a good option if you:

Can make the payments on time: Klarna offers a straightforward no-interest plan, and the only fee it charges is a late fee, so if you never miss a payment, you essentially use the service for free. If you need financing and are positive you can make the payments, Klarna may be a particularly low-cost option.

Want a BNPL plan that earns rewards: Once you download the Klarna mobile app, you can join Klarna’s free rewards program and earn one point for every dollar you spend. Points can be cashed in for rewards, which are redeemable at partner retailers.

Want buyer protection: Klarna extends a buyer protection policy to its BNPL customers, which is a perk not all BNPL lenders offer. If you have a problem with your purchase — for example, it’s never delivered — you can file a dispute, and Klarna will pause your payment until the issue is resolved.

Klarna is not a good idea if you:

Want to build credit: Most BNPL lenders do not report payments to the credit bureaus, and Klarna is no different. Showing a history of on-time payments to the bureaus can help you build credit, which opens the door to more affordable financing options in the future. If credit-building is your goal, go with a credit card or loan instead of a BNPL plan.

Are sometimes short on cash: If you don’t have enough money on your debit or credit card, and Klarna is unable to retrieve payment, you’ll be assessed a late fee and potentially a penalty fee from your bank or credit card company. If your loan is outstanding for long enough, it may also be sent to collections. Not all BNPL lenders send accounts to collections, and this action could eventually affect your credit score.

How to get approved for Klarna

To be eligible for Klarna, you’ll need to be at least 18 years old, be a U.S. resident, provide a valid payment method and be able to receive verification codes to your phone via text.

According to Klarna, each purchase is an individual approval decision, so you may be approved for one purchase but not another. Klarna looks favorably on applicants who show positive credit history with the company, meaning they don’t miss or delay payments.

Klarna’s Pay in 4 plan is not available to residents of New Mexico or Hawaii.

Does Klarna check credit?

Klarna may perform a soft credit check, which doesn't hurt your credit score. Though Klarna doesn't disclose its minimum credit score requirement, borrowers with bad credit or no credit may be eligible to use Klarna’s payment plan.

How does Klarna compare?

» COMPARE: 6 popular buy now, pay later apps

How to get Klarna

Download the Klarna app or Klarna Chrome extension

If you want to use Klarna, you can download its mobile app, where you can create an account and start shopping. Klarna also offers a Chrome extension, which lets you use Pay in 4 at any online store.

Shop with Klarna online and in stores

Some retailers have Klarna integrated into their online checkout flow, which means you can opt in to a Klarna payment plan directly on the retailer’s site.

If you want to shop in person, you’ll need to create a digital card using Klarna’s mobile app. You can then save the card to your mobile wallet and use it to check out at the store.

Alternatives to Klarna