Is Klarna Legit?

Andrew Reyes
A closeup of a hand swiping a credit card through a payment terminal.
Reading Time: 4 minutes

Klarna is a point-of-sale financing option you can use to complete an online purchase. If you want to purchase an expensive pair of shoes, a new living room set, or a brand-new TV but don’t have the money to pay upfront, Klarna may help you get your items with a few different financing options right at checkout.

When you make a purchase from a brand that works with Klarna, you’re provided an option to finance your purchase if you don’t want to pay the entire purchase price at once. Depending on your credit history and qualifications, Klarna may allow you to pay for your purchase in four installments or pay monthly through a personal loan.

To utilize Klarna, you must purchase through a retailer or brand that participates in this financing program. Before choosing to finance your purchase at checkout, it’s important to learn more about Klarna to determine whether this loan option is right for you.

How Does Klarna Work?

There’s no minimum credit score you must have to qualify for a Klarna loan. However, the company runs a soft credit inquiry before offering you a four-installment or 30-day loan for your purchase. If you apply for monthly financing, the company performs a hard credit inquiry to determine the loan terms and interest rate you qualify for.

The maximum personal loan amount offered through Klarna is $300. Your loan amount may increase after you’ve established a positive payment history with the company.

When you choose the 30-day or four-payment installment option, you have a 0% annual percentage rate (APR) as long as you make your payments on time. Your monthly financing loan is offered at a 19.99% APR and you’re susceptible to a $35 late and returned payment fee.

There’s no prepayment penalty and no annual fee for any type of loan with Klarna. You must be at least 18 years old and have a valid credit or debit card to apply for a loan.

Klarna Ghost Card

When you successfully sign up to use Klarna for your purchase, you’re issued a “ghost card,” which is a one-time use credit card. Enter the ghost card’s information when checking out with your approved purchase. Klarna charges the personal debit or credit card you have on file according to the loan terms you previously agreed on.

Klarna Pros and Cons

There are both benefits and drawbacks to using a Klarna loan to finance your purchase.


  • You can finance a purchase total that’s as little as $35.
  • While your credit history is a consideration, there’s no minimum credit score required.
  • There are no annual, origination, or prepayment penalty fees.
  • Once you’re a customer, you can use the Klarna app to shop through participating online retailers.
  • Receive a refund of your purchase price if you return the item.


  • You must have a credit or debit card to complete a transaction with Klarna.
  • Your card on file is automatically charged on your payment due date.
  • You’re charged late payment fees, which vary depending on the type of financing option you have.
  • You owe an initial payment as soon as your merchant approves the purchase with certain financing options.
  • If you choose the monthly financing option, the APR may be higher than your credit card.

Klarna Financing and Pay Later Options

Through Klarna, you may have three different financing options for your approved purchase: pay later, four installments, or monthly financing.

The pay later option simply delays your payment for 30 days. If you’re approved for this option, the debit or credit card you provide is charged 30 days after you’ve made an approved purchase with the retailer.

If you choose the four payment installment loan option, you’ll pay off your purchase in four payments. Your initial payment is due as soon as the retailer ships your item. Then your debit or credit card is charged three more times, once every two weeks, until your loan amount is paid in full.

If you apply for monthly financing for your purchase, Klarna runs your credit and provides you with specific loan terms. You must make your payment each month until your loan balance is paid off. If you don’t pay your loan balance each month, you’re charged interest at a rate of 19.99%. Your loan term may be between six and 36 months.

Is Klarna Safe?

Klarna provides a way for you to make purchases and pay off the purchase price over time. It’s important to understand your terms before agreeing to the loan. When you apply for monthly financing, the company performs a hard credit inquiry, which can negatively affect your credit score.

As a Klarna customer, you benefit from a protection policy on your approved purchase. If you don’t receive the item or it arrives damaged and you need a refund, you can send it back to the retailer. Once your refund is processed, the refunded purchase price is subtracted from your Klarna loan balance.

Is Klarna Right for You?

If you see Klarna as an option at checkout, it may be a helpful way to pay for an expensive item you need but can’t afford to pay for upfront. Klarna loans may also be right for you if you don’t have a high credit limit on your credit card because you’re new to building your credit history.

Since Klarna loans are associated with a high APR, you should only consider them as an option if you know you’ll be able to pay off your loan balance on time. It’s also important to consider the credit cards you have and how the interest rate compares to Klarna.

Analyze any benefits your credit card company provides, such as a rewards program, when deciding how to finance a purchase. If you’re already in debt, adding another loan will negatively impact your financial stability. It’s more beneficial to prioritize addressing your current debt before you take out another loan to purchase an item.

How to Get Started With Klarna

To apply for a loan for your purchase, you can complete an application online or download the Klarna app. Create an account, provide your information, input your credit or debit card information, and answer questions about your purchase. Under the Truth in Lending Act (TILA), Klarna must provide you with all details on the loan you qualify for, including fees and terms.

Once you agree to loan terms, you can use the app to shop with participating online retailers. Use the Klarna ghost card to make your purchase and stay up to date with your loan payments to avoid interest charges.

If you have a big purchase you need to finance, Klarna may offer you different loan options. You should only consider using a Klarna loan if you’re comfortable with the terms, including your payment due date and interest rate.

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