Klarna vs Afterpay, Which One to Opt For?

Klarna vs Afterpay
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Consumers increasingly use BNPL (Buy Now Pay Later) apps to buy products and pay back over time without paying interest. Klarna and Afterpay are two of the most successful BNPL applications, and they’re accepted by well-known retailers like Nike & Old Navy.


Before deciding which is better for your business, it’s good to understand the differences between Klarna and Afterpay. Afterpay is a corporation based in Australia that offers a six-month payment plan. In addition, they impose 5% interest on overdue balances in the event of default.

In contrast, Klarna is a Swedish provider that sells a three-month or longer payment plan with Zero interest immediately after buying. Customers can use Klarna and Afterpay to make purchases now and pay later. This article will give you the information on Klarna Vs Afterpay.

Let us Discuss this in Detail!

Klarna vs Afterpay


Among the most prominent online payment systems is Klarna. It’s a Swedish commercial company that lets clients buy things digitally without inputting or submitting their credit card or contact information. This service allows consumers to shop simply and securely.

Klarna vs Afterpay

Klarna integrates with websites and online shopping extensions to let merchants handle payments. It boasts a speedy purchase process, no shipping fees, and you may buy things without even entering your credit card information. Before they complete your order, they merely ask for simple details like your contact mail, shipping address, phone number, etc.

Klarna’s services are free, making it an excellent option for small businesses looking for a simple way to conduct online transactions without incurring additional fees. Customer data is treated with the utmost confidentiality, and the company has worked with a few of the world’s largest institutions to provide credit monitoring.


Afterpay is a mobile payment service for customers who can’t afford to pay for their purchases all at once. Instead, customers can make purchases now and pay for them in four equal fortnightly installments, with no interest. Afterpay is a type of consumer loan that allows customers to make transactions without paying the entire amount upfront. 

Klarna vs Afterpay

It enables purchasers to buy things without paying for them upfront. On the retailer’s webpage, the company provides an Afterpay tab sponsored by the buyer’s credit card. The tab allows customers to make monthly payments or a single lump-sum payment at the end of the process.


FlexiPay from Afterpay is a financing feature that gives the option to buy things without paying anything upfront. You can choose whether to pay for your order in four equal installments with Afterpay at the finish of each fortnight once you’ve placed it.

Payment is deducted from your designated bank account with no interest or additional fees. The company has established itself as one of Australia’s most popular online shopping destinations by providing this service.

Terms & Conditions

Customers can receive products now and pay in four equal installments with these BNPL apps. You can buy products and services from partner stores and pay throughout time without paying interest once approved. You will never spend more than the cost of your purchase if you make your timely payments.

You’ll make a 25% down payment immediately at purchase, then the outstanding amount over the next 6 weeks. Until the sum is fully paid, another 25% of the total will be billed to your payment in two weeks. In most circumstances, the bank account you’ve connected to your Buy Now Pay Later app account serves as your payment method.


$10 is the least amount of money you can spend on Klarna, meaning you cannot purchase something very small with it. In contrast, the highest is governed by Klarna’s underwriting spending limit.

So while you won’t be able to seek a credit limit increase, you will be able to make individual purchases exceeding your credit limit. In addition, it will authorize customers for an immense buy if its screening engine can.

While Afterpay doesn’t even have a minimum spend amount, the merchants with whom it partners may. Your profile defines your maximum purchasing value and is visible in the Afterpay app. Pre-approval doesn’t ensure that your purchase will be accepted at checkout, Even though the app gives a maximum pre-approval amount.

Eligibility for Klarna and Afterpay

Klarna simply conducts a soft credit query for its pay-in-four option. What this means is that it creates no impact on your credit score. Your credit is not checked when you sign up or make a transaction with Afterpay.


Furthermore, if you miss your payments, it didn’t get reported to credit agencies. This makes Klarna an excellent alternative for those with a poor credit history. And even those people who are just beginning to establish credit.

This gentle inquiry determines if you make your payments on time. Klarna may demand a strict credit check for longer-term loans. If you don’t pay your bill, your default can be notified to the credit reporting agencies, just like most lenders.

Penalties and Late Payment Fees

As long as you complete all regular payments, most purchase now, pay later programs do not impose interest or fees. The BNPL offers of these companies are also not far away from other providers. There are no fees for either service, and the pay-in-four financing has no interest.

Klarna’s retailers may charge you interest if you choose a longer payback term. Interest rates for these loans vary by the merchant but are generally between 0% to 24.99%.


To set up an account or even use their financing, either Klarna or Afterpay does not impose any fees. You may, however, be fined a late fee if you pay late. $10 is the minimum penalty for Afterpay for delayed payment, while Klarna fines its defaulters only $7. The Penalty of Afterpay can be as much as 25% of the original cost of $68, whatever is less.

Both companies do not charge any extra charges for prepayment. So you can make an early payment and don’t worry about anything. This particular feature makes them a better alternative to bank loans that have prepayment charges attached to them.

Do we need a Good Credit History for these Apps?

The credit score criteria for Klarna and Afterpay are not disclosed. Afterpay does not verify consumer credit ratings, while Klarna merely undertakes a gentle inquiry.

Most deals need a down payment of 1/4TH and 25% payments each fortnight until the loan is paid off. Since these loans are short-term, companies such as Klarna and Afterpay are prepared to engage with customers with terrible credit or little credit history.


Which is Safer App?

It is safe to use BNPL apps like Klarna and Afterpay. They are genuine businesses that split purchases into 4 equal installments to help consumers finance their products. However, because this form of financing is so easy to obtain, customers risk making unnecessary purchases and, as a result, spending more than they might otherwise.

Effect on Your Credit Ratings

Neither of the two BNPL companies creates any risk for your credit. The condition is that you repay them their installments in time.

For its pay-in-4 repayment plan, Klarna does what is described as a Mild or Soft credit check, which does not impact your credit score. However, if you need a lengthier credit from Klarna, the company may make a difficult inquiry that appears on your credit record and could lower your credit rating by a few marks.

Afterpay does even less. I don’t even make a check. Afterpay only asks you for your information, like your bank card information, birthdate, contact number, etc., to register you for purchases. If you miss a payment or fail to pay for your items, both BNPL services can report your late installments to credit agencies.


Additional Features of Klarna and Afterpay

Although Afterpay doesn’t offer further financing options at this time, Klarna does. In addition to pay-in-4 transactions, Klarna also offers pay-in-30 and 6-month financing options.

Klarna’s Pay-in-30 service lets you buy products today, return what you don’t want, and only pay for the amount you keep. Of course, you must pay in full for these within 30 days to avoid late payment charges or penalties.

Klarna also provides 6-month financing on larger purchases, allowing for more flexible payments in collaboration with banks.

One of Klarna’s standout advantages is that you receive incentives for every purchase. These are like credit card reward points; you can use them to get discounts on some things or further investments.


Who has a better mobile application and user interface?

Klarna’s (iOS, Android) mobile app is quite user-friendly. It creates customized shopping lists according to your interests, favorites, and previous purchases.

You may also establish price alerts to get notified when the price of your bookmarked items reduces or browse special bargains. In addition, customers may track their goods and request refunds to avoid paying for returned items.

You may use the Klarna app to buy at over two hundred thousand stores. You can do all of that with just one card number that allows users to make transactions at any shop or merchant where Visa is accepted.

While many BNPL solutions are restricted to shops inside their environment, Klarna will enable clients to buy and pay later on any U.S. website using a virtual card number.


The Conclusion

Down-payment required during the purchase25%25% 
Period of Repayment25% of Purchase cost every 14 days25% of Purchase cost every 14 days
Interest Charged on purchase0%0%
Level of Credit History inquirySoft credit check requiredNo Credit Check Required
Late Payment Penalty $7Lower amount among 25% of Purchase price or 68 Dollars.
The minimum penalty is 10 Dollars.
Branded shops on the appBed Bath & Beyond, Macy’s, Sephora, Nike, H&MBed Bath & Beyond, Old Navy, Forever 21, Pandora, UGG
Other products of the companiesPay in 30 days or finance for 6 monthsNone

We evaluated these two financing choices in this article to help you determine which is ideal for you based on the features and benefits of each app. Between Klarna and Afterpay, we think Klarna is the best BNPL app.

It has additional financing alternatives, over double as many merchants in its market, and can generate Digital card numbers that may be used wherever Visa is recognized.

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