Klarna Buy Now, Pay Later: 2022 Review

Klarna’s pay-in-four plan lets you divide your purchase cost into four interest-free installments instead of paying all at once.

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Our Take

5.0

NerdWallet rating 

The bottom line:

Klarna may be a fit for borrowers who are shopping for a big-ticket item and can comfortably afford the monthly payments.

Klarna
Min. credit score
None
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Pros & Cons

Pros

  • Offers zero-interest loans.
  • Includes access to rewards program.
  • Multiple customer service channels.

Cons

  • Charges late fee.
  • No option to build credit.
  • No option to turn off automatic payments.

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Full Review of Klarna

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

Loan amount

Not disclosed.

Payment structure

Pay-in-four plan.

Interest

0%.

Availability

Available online and in stores.

Conducts soft credit check

Yes.

Minimum credit score

Not disclosed.

Late fee

$7.

Other fees

No other fees.

Option to reschedule a payment

Yes.

Pauses account when payment is missed

Yes.

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.

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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?

APR

Terms

Fees

Affirm
NerdWallet rating 

on Affirm's website

0%-30%.

4 installments, due every 2 weeks; monthly payment plans range from 3-60 months.

No fees.

Afterpay
NerdWallet rating 
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on NerdWallet's secure website

0%.

4 installments, due every 2 weeks.

$8 late fee.

Klarna
NerdWallet rating 
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on NerdWallet's secure website

0%.

4 installments, due every 2 weeks.

$7 late fee.

PayPal
NerdWallet rating 
See my rates

on NerdWallet's secure website

0%.

4 installments, due every 2 weeks.

No fees.

Sezzle
NerdWallet rating 
See my rates

on NerdWallet's secure website

0%.

4 installments, due every 2 weeks.

  • $0 late fee.

  • $5 rescheduling fee.

  • $10 account reactivation fee.

Zip
NerdWallet rating 
See my rates

on NerdWallet's secure website

0%.

4 installments, due every 2 weeks.

  • $1 convenience fee per installment.

  • $5, $7 or $10 late fee.

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

If you have good or excellent credit (690 credit score or higher), you may consider a 0% APR credit card. These cards offer introductory periods of up to 21 months and charge no interest during that period. You may also receive a sign-up bonus or access to a rewards program.

If you’re looking to fund a large, essential purchase, you could apply for a personal loan. Personal loans have fixed interest rates and longer repayment terms, and there are options for borrowers with fair or bad credit (689 credit score or lower).

You can pre-qualify with NerdWallet to see your loan options. Pre-qualifying doesn’t affect your credit score.

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Methodology

NerdWallet’s review process evaluates and rates “buy now, pay later” (BNPL) loan products from the top financial technology providers. We collect over 40 data points from each lender, verify the information with company representatives and compare the lender with others that seek the same customer or offer a similar BNPL product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to BNPL providers that offer consumer-friendly features, including: soft credit checks to pre-qualify, zero interest and minimal fees, transparency of rates and terms, flexible payment options, accessible customer service and built-in borrower protections. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

This methodology applies to classic BNPL loans, which divide payment into four equal installments, typically due over six weeks. Some providers offer other loan products with longer terms, which may be mentioned in the review but are not part of the rating process. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.