Ultimate Guide to Klarna

What Is Klarna?

Klarna is a Swedish company that allows you to spread the cost of purchases you make from selected retailers.

How Does Klarna Work?

There are three different plans that Klarna offer…

Pay 30 days later : You do not pay for your order when you purchase it, and instead will receive an invoice from Klarna for the amount of the item. This will then need to be paid within thirty days.

Slice It financing : This allows you to split the cost of your purchase over a longer period. This option will require you to go through a credit check and interest will be added to the cost of the item.

Slice It In 3 : This divides the cost of your purchase into three equal instalments. An affordability assessment will be carried out but this is not a full credit check. The first instalment is paid at the time of purchase, with the next two being due in thirty and sixty months.

How Do I Sign Up For Klarna?

You can sign up for Klarna by creating an account on their website. You can also create an account at the checkout of an online store that gives you the option to pay with Klarna.

Which Stores Accept Klarna?

There are many high street and online stores that accept Klarna (including PrettyLittleThing and BooHoo) You will find a full list on their website. Retailers may also advertise that you can pay using Klarna on their own websites.

How Much Does Klarna Cost?

There are no upfront costs to pay when using Klarna and no annual fee so in most cases it will not cost you anything. The only service that incurs interest charges is the Slice IT option.

Does Klarna Have A Limit?

You will be given a limit when you set up an account with Klarna. The amount of the limit will be based on the affordability checks that are carried out. You can see what your limit is on the Klarna app.

Can You Pay Off Klarna Early?

You are not able to change the payment dates on your Klarna agreement, but you are able to make the payment before the due date if you want to. You can do this through the pay now option on the app. You can also use this option to pay the full amount that you still owe.

Does Klarna Affect Your Credit?

If you use Klarna to pay in thirty days, or to split the cost into three equal payments, then this will have no impact on your credit report. Klarna does not carry out a credit check and they do not report to credit reference agencies about how you manage your account. However, they will use debt collection companies to collect any money that is owed to them, so you there will be consequences for missing payments.

If you use Klarna for financing, then a credit check will be carried out and this will show on your credit report. The way that you handle this account will affect your credit and you may find it more difficult to get credit in the future if you do not keep up repayments.

Why Was I Not Eligible For Klarna?

When you attempt to make a purchase with Klarna, they will always check your eligibility. This means that some customers have found that they have been declined, even if they have purchased items using the service before.

Klarna will not reveal the reasons why your specific application has been declined, but it is likely to be for one of the following reasons.

• The information on your application can’t be verified. This may happen if you have recently changed address, or there are mistakes on your application.
• You have purchased several other items using Klarna recently and you have reached your credit limit. You could try applying again when some of your other items have been repaid.
• You have asked for the item to be shipped to a different address. Your application may be declined if the shipping address and billing address do not match.

Overview

Klarna is a good option to buy things that you need if you do not have quite enough money, but you know you will do shortly. It is also useful for spreading the cost of a large purchase.

Affordability checks will be carried out when you apply for Klarna and it is recommended that you only apply if you are sure you can make the repayments to avoid any financial difficulties in the future.