Klarna vs. Afterpay: Which Should You Choose? [2024]

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Imagine this scenario: You’re shopping online and you find the perfect item, but you don’t have the funds to pay for it upfront. That’s where buy now, pay later (BNPL) apps like Klarna and Afterpay come in. These apps allow you to make purchases and pay over time without any interest. But which one should you choose? In this article, we’ll compare Klarna and Afterpay to help you make an informed decision.

Quick Answer

If you’re looking for a comprehensive BNPL app with more financing options, a larger marketplace, and additional features, Klarna is the clear winner. With Klarna, you can pay in 30 days or finance your purchase for up to 36 months. They also offer rewards on every purchase and the ability to create virtual card numbers for added security. Afterpay, on the other hand, has the same terms as Klarna but lacks the additional financing options and features.

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Quick Tips and Facts

  • Klarna and Afterpay are both popular BNPL apps accepted at numerous brands, including Bed Bath & Beyond, Nike, and Old Navy.
  • Klarna offers more financing options, a larger marketplace, and the ability to create virtual card numbers.
  • Afterpay has the same terms as Klarna but does not offer additional financing products.
  • Both apps allow you to receive items today and pay over time without any interest.
  • Klarna’s minimum purchase amount is $10, while Afterpay does not have a minimum purchase amount.
  • Klarna performs a soft credit check for its pay-in-four service, while Afterpay does not check credit when opening an account or making a purchase.
  • Both services do not charge interest or fees for pay-in-four financing.
  • Klarna may charge interest for longer repayment terms, ranging from 0% to 29.99%, while Afterpay does not offer longer-term financing.
  • Klarna’s app offers personalized wish lists, price drop alerts, and the ability to create a one-time card number for purchases anywhere Visa is accepted.
  • Afterpay’s app allows browsing and purchasing from over 90,000 retailers, viewing purchase history, and changing payment methods.
  • Klarna offers pay-in-30 and 36-month financing, as well as rewards on every purchase, while Afterpay does not offer additional financing options.

Background: The Rise of BNPL Apps

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In recent years, BNPL apps have gained popularity as a convenient and flexible way to make purchases. These apps allow you to split your payments into smaller installments, making it easier to afford big-ticket items or manage your budget. Klarna and Afterpay are two of the most well-known BNPL apps in the market, offering similar services with slight differences. Let’s dive deeper into the features and benefits of each app.

Klarna vs. Afterpay: Terms

Both Klarna and Afterpay allow you to receive your items today and pay over time without any interest. However, there are some differences in their terms and conditions.

Klarna Terms

  • Payment Schedule: With Klarna, you’ll typically pay 25% of the purchase amount at the time of purchase, followed by 25% every two weeks until the balance is paid off.
  • Interest and Fees: Klarna does not charge any interest or fees for their pay-in-four financing option. However, if you choose longer repayment terms, Klarna may charge interest ranging from 0% to 29.99%.
  • Minimum Purchase Amount: Klarna requires a minimum purchase amount of $10.
  • Additional Financing Options: Klarna offers pay-in-30 and 36-month financing options, allowing you to spread out your payments over a longer period.
  • Rewards: Klarna also offers rewards on every purchase, giving you even more value for your money.

Afterpay Terms

  • Payment Schedule: Afterpay follows a similar payment schedule as Klarna, with 25% due at the time of purchase and 25% every two weeks until the balance is paid off.
  • Interest and Fees: Like Klarna, Afterpay does not charge any interest or fees for their pay-in-four financing option.
  • Minimum Purchase Amount: Afterpay does not have a minimum purchase amount, making it accessible for smaller purchases.
  • No Additional Financing Options: Unlike Klarna, Afterpay does not offer additional financing options beyond their pay-in-four plan.

Klarna vs. Afterpay: Credit Requirements

When it comes to credit requirements, both Klarna and Afterpay have different approaches.

Klarna Credit Requirements

  • Soft Credit Check: Klarna performs a soft credit inquiry for their pay-in-four service. This means that it won’t impact your credit score when you apply or make a purchase.
  • No Credit Check for Other Services: For Klarna’s other financing options, such as pay-in-30 or 36-month plans, they may perform a hard credit check. However, this is not required for their pay-in-four service.

Afterpay Credit Requirements

  • No Credit Check: Afterpay does not check your credit when opening an account or making a purchase. This makes it a great option for those with no credit history or who want to avoid a credit check.

Klarna vs. Afterpay: Interest and Fees

One of the key advantages of using BNPL apps like Klarna and Afterpay is that they don’t charge any interest or fees for their pay-in-four financing option. However, there are some differences when it comes to longer repayment terms.

Klarna Interest and Fees

  • Pay-in-Four: Klarna’s pay-in-four financing option does not charge any interest or fees.
  • Longer Repayment Terms: If you choose longer repayment terms with Klarna, such as pay-in-30 or 36-month plans, they may charge interest ranging from 0% to 29.99%. The interest rate will depend on your creditworthiness and the specific terms of your financing agreement.

Afterpay Interest and Fees

  • Pay-in-Four: Afterpay’s pay-in-four financing option also does not charge any interest or fees.
  • No Longer Repayment Terms: Afterpay does not offer longer-term financing options like Klarna. If you need more time to pay off your purchase, Klarna may be a better choice.

Klarna vs. Afterpay: Mobile App

Both Klarna and Afterpay offer mobile apps that enhance your shopping experience and provide additional features.

Klarna Mobile App

Klarna’s mobile app is packed with useful features that make shopping more convenient and enjoyable. Here are some highlights:

  • Personalized Wish Lists: You can create personalized wish lists within the app, making it easy to keep track of items you’re interested in.
  • Price Drop Alerts: Klarna’s app also allows you to set price drop alerts for specific items. If the price drops, you’ll be notified, giving you the opportunity to snag a great deal.
  • Virtual Card Numbers: One unique feature of Klarna’s app is the ability to create a one-time card number for purchases anywhere Visa is accepted. This adds an extra layer of security when making online purchases.

Afterpay Mobile App

Afterpay’s mobile app is designed to provide a seamless shopping experience. Here are some features you can expect:

  • Browsing and Purchasing: Afterpay’s app allows you to browse and purchase from over 90,000 retailers within their network. You can easily find the items you’re looking for and complete your purchase in just a few taps.
  • Purchase History: The app also keeps track of your purchase history, making it easy to review past transactions and keep an eye on your spending.
  • Payment Method Management: Afterpay’s app allows you to easily manage your payment methods, giving you control over how you pay for your purchases.

Klarna vs. Afterpay: Other Products

While both Klarna and Afterpay offer pay-in-four financing options, Klarna goes a step further by providing additional financing products and rewards.

Klarna Other Products

  • Pay-in-30: In addition to their pay-in-four option, Klarna also offers pay-in-30 financing. This allows you to spread out your payments over 30 days, giving you more flexibility.
  • 36-Month Financing: Klarna’s most extended financing option allows you to finance your purchase for up to 36 months. This is ideal for larger purchases that you want to pay off over a more extended period.
  • Rewards: Klarna offers rewards on every purchase, allowing you to earn points that can be redeemed for discounts or other perks. This adds even more value to your shopping experience.

Afterpay Other Products

  • No Additional Financing Options: Afterpay focuses solely on their pay-in-four financing option. If you’re looking for more flexibility in terms of repayment options, Klarna may be a better choice.

Frequently Asked Questions (FAQs)

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What is the downside of Klarna?

Klarna’s main downside is that they may charge interest for longer repayment terms, ranging from 0% to 29.99%. This means that if you choose to finance your purchase for a more extended period, you may end up paying more in interest. However, if you stick to their pay-in-four or pay-in-30 options, you won’t incur any interest or fees.

What’s the difference between Afterpay and Klarna?

The main difference between Afterpay and Klarna is the additional financing options and features offered by Klarna. While both apps have the same terms for their pay-in-four financing option, Klarna goes beyond that by providing pay-in-30 and 36-month financing options. Klarna also offers rewards on every purchase and the ability to create virtual card numbers for added security.

Read more about “Is Klarna Better Than Zip? …”

What is the downside of Afterpay?

Afterpay’s main downside is that they do not offer additional financing options beyond their pay-in-four plan. If you need more time to pay off your purchase, Afterpay may not be the best choice. However, if you’re looking for a simple and straightforward way to split your payments into four installments, Afterpay is a solid option.

Does Afterpay or Klarna affect your credit score?

Both Afterpay and Klarna do not impact your credit score if you make your payments on time. They do not perform a credit check when opening an account or making a purchase, so your credit score won’t be affected. However, it’s essential to make your payments on time to avoid any late fees or negative consequences.

Conclusion

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When it comes to choosing between Klarna and Afterpay, Klarna emerges as the clear winner. With more financing options, a larger marketplace, and additional features like rewards and virtual card numbers, Klarna offers a more comprehensive BNPL experience. Whether you’re looking to pay in four installments, spread out your payments over 30 days, or finance your purchase for up to 36 months, Klarna has you covered. So, next time you’re shopping online and need a flexible payment option, give Klarna a try.

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