Klarna vs Affirm: Which Buy Now Pay Later Service Is Best? JUNE 26, 2022

Adam K.

3 min read

With an endless number of Buy Now, Pay Later Companies popping up, let’s look at which service is best for you.


Klarna is a good option if:

  • You do not qualify for a credit card or you do not want to use your credit card
  • Looking to spread out the cost of a gift for special occasions e.g Holiday or Birthday
  • You can afford to pay-off the purchase over 6 weeks


Affirm is a good option if:

  • Offered 0% percent financing through Affirm
  • You do not qualify or necessarily want a credit card
  • Looking to responsibility fund a large purchase and know how much you will pay upfront

Key Takeaway:

Both Klarna and Affirm offer nearly identical services. Klarna is offered at 250,000 retailers worldwide, while Affirm is available at 29,000 worldwide. However, Affirm does appear to be available at a large majority of US retailers.

Klarna’s primary offering is its 4 interest-free payment plans, known as ‘Pay in 4.’ With ‘Pay in 4’, late fees are capped at . On the other side, Affirm offers interest-free financing for qualified applicants through its 3, 6, and 12-month repayment plans. Affirm does not have any late fees and offers purchasing power up to ,500.

If you are approved for interest-free financing, Affirm is a better option, given the longer repayment terms, greater purchasing power, and absence of late fees.


At A Glance: Klarna vs Affirm

Features Klarna Affirm
Standout Feature Available at 250,000 retailers online and in person. Purchasing power up to ,500 for qualified applicants
Interest Charges 0% 0% for qualified applicants
Credit Limit – Does not specify a limit to ,500
Credit Impact Soft credit check Soft credit check
Repayment Terms 25% every two weeks. 3 month, 6 month, and 12-month repayment plans
Additional Financing Options Pay in 30 days, 6 – 36 month financing None listed.
Prepayment Fees None None
Late Fees Up to None listed
Popular Retailers Macy’s, Footlocker, Adidas, Gucci, Bloomingdales, Ralph Lauren BestBuy, Peloton, Walmart, and Adidas

Pros & Cons


0% APR for qualified applicants APR as high as 30%
No late fees On-time payment history does not always impact your credit score
Purchasing power of up to ,500 Downpayment may be required (10 -50%) of the purchase cost


Interest-free financing Late fees
No prepayment fees Does not report on-time payments to credit bureaus
Multiple payment options Reports delinquencies to credit bureaus

Klarna vs Affirm: Terms

Klarna offers 3 types of financing options: its most popular choice being the company’s ‘pay in 4’ with additional financing options including a ‘Pay in 30 days’ and 6 – 36 month financing.

With ‘pay in 4,’ purchases are split over 4 equal installments. When you purchase an item through Klarna, 25% is due upfront. The remaining balance is divided over 3 payments, paid every two weeks. There are no interest charges with the ‘Pay in 4’ repayment plan.

Additional financing options through Klarna include:

Pay in 30 Days: No payment upfront. Payment is due in 30 days

Klarna Financing: Average APR 19.99% with 6 -36 month terms

To make payments with Klarna, you can pay online with your debit card or your bank account information. You cannot make payments with a credit card, although that would defeat the purpose.

Affirm allows its customers to split purchases made at its partner stores into monthly payment plans, usually 3, 6, or 12-month plans. It’s important to note; not all retailers offer the same repayment plans and terms.

Depending on your creditworthiness and where you are shopping, Affirm offers an APR between 0% – 30%, with purchasing power between and ,500 for qualified applicants. Some applicants may be required to make a down payment. More commonly, its shorter repayment plans are more likely to have 0% interest if you have good credit.

Affirm negotiates loan eligibility and criteria individually, so there’s no way to tell where you will and will not be approved with favorable terms or approved at all.

Payments are due 1 month after the purchase processing date and on the same day in the subsequent month.

Credit Requirements

Both Affirm and Klarna perform a soft credit check when you are applying. A soft credit check does not have an impact on an applicant’s credit score. Neither company reports on-time payments using their standard repayment options, and Klarna will report delinquencies to credit bureaus. Both companies may report repayment history when using their longer-term financing options.

While Affirm does not stipulate a minimum credit score required for approvals, they do not guarantee approval. Affirm considers a variety of factors, including:

  • Credit score
  • Payment history with Affirm
  • How long you have had an Affirm account

Affirm negotiates loan eligibility and criteria individually, so there’s no way to tell where you will and will not be approved with favorable terms or approved at all. You may be approved at some merchants but not at others.

As mentioned above, financing through Affirm may build your credit. According to the company, they may report some activity with the company, unlike a credit card that reports all activity. So, if you are making on-time payments, it may help positively impact your score.

There are certain types of loans Affirm does not report to Experian. For instance, Affirm will not report a loan to Experian if the loan is 0% and 4 biweekly payments, or if you were only offered one option at the application of a three-month payment term with 0%.

Klarna also takes into consideration your credit score in addition to other factors such as:

  • Internal data such as past payment history
  • Unpaid balances
  • Length of time you have been a customer
  • The total amount in your shopping cart
  • Too many purchases in a short amount of time, e.g., fraud prevention

Interest & Fees

Using Klarna’s ‘Pay in 4’ option, there is no interest or fees if you pay on time. However, if you fail to make timely payments, Klarna charges a late fee of up to . And, as mentioned above, Klarna also offers an additional financing option with an average APR of 19.99% and repayment terms between 6 and 36 months.

On the other side, Affirm offers interest rates between 0–30% APR, based on a customer’s credit. There are no late or hidden fees with Affirm. Both Klarna and Affirm do not charge any prepayment fees should you decide to pay off your balance early.

Note: I was approved for 0% interest for a ,500 purchase for a pair of West Elm chairs while having a 760 credit score.

Klarna vs. Affirm: Mobile App

Both Klarna and Affirm are available in the Apple App Store and Google Play.


  • Store to door tracking
  • Hassle-free returns on the app
  • Ability to earn points on purchases for special discounts
  • Ability to create a one-time virtual card so you can ‘pay in 4’ anywhere
  • Price drop notifications


  • The Affirm mobile app has an average rating of 4.9 stars (out of 5), with 249,000 reviews
  • With the Affirm app, easily manage payments and set up autopay.
  • Create a 1-time virtual card
  • The Affirm app offers a referral when a user refers a new customer
  • View retailers with special offers


Real World Investor


Adam is the founder of realworldpersonalfinance.com, an investing website dedicated to helping discerning individuals make the best investment decisions.

Before starting Real World Personal Finance, he was a Senior Vice President at one of the country's largest investment banks. He has over 10 years of experience working in financial services. His experience includes working with complex derivatives while spending many years working on a trading floor.

He has a bachelor's degree in Business Administration, majoring in finance.