Klarna Review | Interest-Free Buy Now, Pay Later Finance | Bobatoo

Klarna Review

No minimum credit score for 'pay later' finance

No interest charged if paid on time

Easy-to-use app

Klarna logo

What is Klarna?

Klarna is one of several new finance providers allowing online shoppers to spread the cost of their payments over time.

Similar to the idea of Buy Now, Pay Later catalogues like ‘Very’, Klarna works with a diverse and ever-expanding directory of online stores including big names like ASOS, Ray-Ban, Michael Kors, H&M and Schuh.

Klarna's website homepage

How does Klarna work?

Klarna is an alternative payment method (just like PayPal or Apple Pay) which offers a quick and easy finance option to online shoppers. When completing the checkout process online, you simply select Klarna as your method of payment.

You do not need to create a Klarna account to complete a purchase, but you do need:

  • A UK bank account
  • To be aged over 18
  • A UK residential address

Klarna UK offers three methods of payment:

  • Pay 30 days later – ‘Pay later’ with Klarna allows shoppers to complete their order without paying a single penny. Once it has been dispatched, you have between 14 and 30 days to complete your payment (depending on the retailer). Many fashion retailers advertise this as ‘try before you buy’ as you are able to try the items on and send them back if they are unsuitable, all without any money leaving your account.
  • 3 instalments – This option allows shoppers to pay for an order in 3 identical instalments, each one automatically taken from the registered bank account 30 days after the last. The first payment is always taken at checkout.
  • Financing – Referred to by some as ‘Klarna: slice it’, some items are available on Klarna finance, which allows shoppers to pay in monthly instalments.

Option 1: Pay 30 days later

Klarna notifications on mobile

Klarna’s ’30-days-later’ payment option allows shoppers to pay for the items they order between 14 and 30 days after it has been dispatched.

Acceptance is dependent on a ‘soft credit check’ (this does not impact your credit rating) and various other factors such as your age and the time of purchase.

This has become a popular option with fashion retailers, who can now essentially allow their shoppers to try on clothes before paying for them, just as they would if shopping in a traditional store.

When shopping with ‘Klarna pay later’, customers don’t even need to enter their payment details – the bill is settled by Klarna knowing that you will either return the item and receive a refund or settle your bill with them within the set period.

According to Klarna, if your bill is not settled within the pre-agreed period (between 14 and 30 days) you will not be charged a late payment fee and your credit score will not be affected. Despite this, there have been some reports of shoppers’ credit scores being affected by missing payments, so try to pay off your debt as soon as possible.

Option 2: Interest-free instalments

Payment details showing on mobile

Klarna’s option for 3 interest-free instalments is available with selected retailers, allowing shoppers to make 3 identical payments to cover the cost of their shop.

Like with the aforementioned ‘pay 30 days later’, Klarna will use a soft credit check to ensure your eligibility to pay in 3 instalments. No interest is charged on these payments and there are no late payment fees – if payment is declined, Klarna will try again 7 and then 14 days later.

The first payment is always taken at the point of purchase, with the following 2 payments taken 30 and 60 days later respectively. To pay these instalments, Klarna requires you to enter your debit or credit card details in order to make these payments.

Option 3: Consumer financing

Details of credit plan and payments on mobile

Klarna’s option for 3 interest-free instalments is available with selected retailers, allowing shoppers to make 3 identical payments to cover the cost of their shop.

Like with the aforementioned ‘pay 30 days later’, Klarna will use a soft credit check to ensure your eligibility to pay in 3 instalments. No interest is charged on these payments and there are no late payment fees – if payment is declined, Klarna will try again 7 and then 14 days later.

The first payment is always taken at the point of purchase, with the following 2 payments taken 30 and 60 days later respectively. To pay these instalments, Klarna requires you to enter your debit or credit card details in order to make these payments.

Klarna Reviews

When it comes to something as important as finance, it is often a good idea to see whether or not other customers have had a good experience before trying it out for yourself.

We’ve used customer review website, Trustpilot, to gauge the feedback that Klarna has had from customers. However, there are various other review sites which might offer varied results.

From more than 8,600 reviews on Trustpilot, Klarna UK average a 4.6/5 rating.

Klarna review on trustpilot

84% of Klarna customers said that the service received was ‘great’, while just 10% admitted that their experience with Klarna was either ‘poor’ or ‘bad’.

Positive comments include:

  • An excellent way to spread the cost of purchases
  • The app is really easy to use
  • Excellent service from start to finish
  • Quick process
  • Flexibility

Some negative comments left by Karna users include:

  • Problems when trying to contact Customer Services
  • No reminder notification to say when a payment is due
  • Some issues regarding refunds and payments

Despite a few negative experiences here and there, it’s always best to look at a range of reviews on different review websites so that you can gauge a fair, overall idea of the services provided by the BNPL company.

Where can I use Klarna?

So, what shops use Klarna? Unfortunately we’d be here forever if we were to list them all, but there are more than 130,000 separate merchants who offer Klarna as a potential payment option.

Some of the most popular retailers partnered with Klarna include:

  • H&M
  • Ray-Ban
  • ASOS
  • Gymshark
  • Topshop
  • Superdry
  • Adidas
  • UGG
  • DW Sports
  • Expedia

How does Klarna make money?

Whenever somebody decides to pay with Klarna, the respective merchant pays the BNPL company a small fee. Some of Klarna’s more long-term installment plans also charge interest, which is another way in which Klarna makes money.

Is Klarna safe?

Klarna safeguards your personal information, enforcing a zero-fraud protection policy. Klarna’s buyer protection policy also protects customers if an order arrives damaged or does not arrive at all.

Does Klarna affect your credit score?

As mentioned earlier in this review, Klarna insists that its ‘pay 30 days later’ and ‘3 instalments’ plans do not impact a customer’s credit rating, even following a late or missed payment. Despite this, there have been various reports of missed or late payments showing up on customer’s credit reports and therefore having a negative impact on their credit rating.

Klarna’s ‘consumer financing’ option requires a hard check on a credit rating. This can impact your credit score and can also be seen by any future lenders performing a credit check.

If you are going to take out finance with Klarna, we suggest you ensure that all of your payments are kept up to date as per your initial agreement.

Is there a limit on Klarna?

Each individual customer will be given their own credit limit, just like with a credit card. The limit you are given will depend on various factors, including previous credit history and the results of Klarna’s affordability assessment (both will require a soft check on your credit history).

You’ll be able to see your Klarna credit limit on the Klarna app, while it will also be shown on each monthly statement you receive.

Why is Klarna not working?

If you’re trying to make a payment using Klarna, but you’re being turned down, it could be due to:

  • Financial circumstances – Klarna might not deem their financing offers suitable for your current financial situation.
  • Outstanding balance – You may have an existing purchase on your Klarna account which is taking up your credit limit. Pay this off before you make another purchase.
  • Missed information – You may have simply missed out an important piece of information, such as your date of birth or address.

Customer service - Contact Klarna

If you experience problems whilst using Klarna, there are a few different ways in which you can get in touch with one of their advisors. These include:

Klarna chat – available via the Klarna website and Klarna app

Phone – Freephone 0808 189 3333

Twitter @AskKlarna