Apps like Klarna: 5 ‘buy-now, pay-later’ platforms

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In a Nutshell

Apps like Klarna allow you to spread out your payments over several weeks or even months, making major purchases more manageable. But watch out for interest and additional fees.
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With Klarna, you can make a purchase now and spread out your payments into installments with several different payment plans, making it a useful alternative to personal loans or high-interest credit cards.

These “buy-now, pay-later” apps aren’t always the best option if you’re looking to finance a major purchase, though — they may charge interest or high late fees. But if you want more time to pay off a purchase, here are five buy-now, pay-later apps like Klarna that can help you spread out your payments.

Best for no-fee loans: Affirm

Why Affirm stands out: Like Klarna, Affirm doesn’t charge late fees, service fees or prepayment penalties. But Klarna may charge added fees depending on the type of plan you have. Affirm doesn’t charge any fees.

  • Loan terms — Affirm may give you a longer loan term than you can get with Klarna. Typical repayment terms for Affirm loans are three, six or 12 months. But for large purchases, some people may qualify for terms as long as 48 months.  
  • Loan amounts — With Affirm, you can finance purchases of up to $17,500.
  • Down payment — Depending on your credit and the amount of the purchase you want to finance, Affirm may require a down payment.
  • Simple interest — Many credit cards use compound interest, where your interest is compounded daily on every transaction you make as well as your existing balance. Instead, Affirm charges interest based just on your purchase cost (rather than on the cost of the purchase and accrued interest).
  • Accepted at some brick-and-mortar stores — Like Klarna, you can use Affirm to pay for purchases at some physical stores.

Read our full review of Affirm to learn more.

Best for no-interest loans: Afterpay

Why Afterpay stands out: Depending on which plan you have, Klarna’s APR can be in the double digits. But Afterpay doesn’t charge any interest or fees as long as you make all of your payments on time.

  • Instant approval decision — When you apply for an Afterpay loan at checkout, you’ll receive a decision right away. If you’re approved, you can complete your purchase immediately.
  • Limited repayment options — Afterpay has fewer repayment options than Klarna. If you’re approved for a loan, your payments are split into four equal installments due every two weeks. There isn’t an option for a longer loan term.
  • Late fees — If you’re late making a payment, you could incur costly fees. Afterpay’s late fees can be as high as 25% of your order amount.
  • Minimum purchases — While Afterpay doesn’t specify a minimum loan amount, its partner retailers may have their own minimum purchase amount.

Read our full review of Afterpay personal loans to learn more.

Best for purchases under $1,000: Bread

Why Bread stands out: If you’re purchasing items that cost between $50 and $1,000, Bread’s SplitPay option allows you to make four interest-free installment payments. If you make all of your payments on time, you can avoid interest charges or added fees.

  • Two payment options — In addition to SplitPay, Bread offers an installment option. Terms can range from three to 36 months.
  • Interest rates — While you can avoid interest with the SplitPay option, the APR on Bread installment loans can range from 0% to well into the double digits. Your interest rate is dependent on factors like your credit scores and past repayment history.
  • You may not be approved for the full amount — If you aren’t approved for a loan for the full amount of a purchase, you could be asked to pay a certain amount upfront. The rest can be financed.

Read our full review of Bread personal loans to learn more.

Best for multiple shopping options: QuadPay

Why QuadPay stands out: With QuadPay, you can shop anywhere Visa cards are accepted — including online and physical retailers — and split purchases that fall within a certain dollar limit into four installment payments.

  • No effect on your credit scores — QuadPay doesn’t use hard credit checks and doesn’t report directly to the credit bureaus, so applying for and using a loan from QuadPay doesn’t affect your credit scores.
  • Loan term — While Klarna offers longer loan terms, QuadPay’s terms are short. Your purchase is spread out into four payments over six weeks.
  • Interest-free payments — QuadPay doesn’t charge interest on its loans. Instead, every purchase made through QuadPay is subject to a $1 convenience fee per installment payment.
  • Late fees — If you’re late with a scheduled payment, you could incur a late fee as high as $10.

Learn more in our full review of QuadPay.

Best for promotional offers: Sezzle

Why Sezzle stands out: Like Klarna, Sezzle has a rewards program. Shoppers who use Sezzle to pay for purchases can earn Sezzle Spend, a rewards program where you can get credits through promotions. You can use your Sezzle Spend credits toward future purchases made with participating merchants.

  • One payment plan — There’s only one payment plan option with Sezzle — four payments over six weeks.
  • No interest charges — Sezzle doesn’t charge any interest, and the only fees it charges are late payment fees.
  • Some issuers don’t support Sezzle payments — Some banks and financial institutions don’t support Sezzle’s platform, so they can’t be linked to your account for your installment payments. Currently, Capital One and American Express credit cards aren’t acceptable payment options. (It’s important to note that if you pay with a credit card you might end up paying interest or even fees to your credit card issuer if you don’t pay off the amount charged to your card on time and in full.)

What to watch out for with apps like Klarna

If you need to make a major purchase before you have the money saved to buy it outright, apps that loan money are an option. If you need a laptop for school, a couch for your new apartment, or pots and pans so you can cook at home, buy-now, pay-later apps could be a useful alternative to credit cards.

But there are a few things to keep in mind before using apps like Klarna.

  • It can lead to nonessential purchases. Because you can spread out your payments over several months, you might be tempted to buy nonessentials like clothes or electronics that you don’t really need. It could be easy to rack up a substantial amount of debt.
  • It can negatively affect your credit scores. While some buy-now, pay-later apps don’t do credit checks or report to the major credit bureaus, others do. Each hard credit inquiry can drop your credit scores, although by how much can vary greatly. A buy-now, pay-later loan can also affect your credit utilization rate, which is another important factor in determining your credit scores.
  • You may be charged interest and added fees. Depending on which app and payment option you use, you may pay interest on your purchases, and the APR can be in the double digits. Some apps also charge extra fees, like convenience fees and late payment fees, which can add to your total cost.

How we picked these loan apps

To pick the top apps like Klarna, we researched 10 different buy-now, pay-later apps. We evaluated each app based on their loan amounts, available repayment terms, interest rates and added fees. We also looked at factors like the apps’ partner retailer networks, as well as the potential effect the apps could have on credit scores.

About the author: Kat Tretina is a personal finance writer with a master’s degree in communication studies from West Chester University of Pennsylvania. Obsessed with her many side hustles, she focuses on… Read more.