“Buy now, pay later” apps like Klarna are the digital version of layaway. The twist is that you can enjoy the products you buy using a BNPL app while you’re paying off your purchase, typically in four interest-free installments.
Klarna is among the most popular buy now, pay later apps, but whether it’s the best option for you will depend on your needs. Here’s what you need to know about six of the best alternatives to Klarna to help you choose the right BNPL app for you.
What Are the Best Apps Like Klarna?
Consumers can use buy now, pay later apps to shop, pay bills for services, buy groceries or finance a trip. If you’re wondering what other apps are similar to Klarna, here are the top six options:
- Best Overall: Affirm
- Best for Payment Flexibility: Afterpay
- Best for Getaways: Uplift
- Best for Bills: Zip
- Best for PayPal Users: PayPal Pay in 4
- Best for Improving Credit: Sezzle
1. Best Overall: Affirm
Affirm can be used for experiences, travel and shopping in stores or online. Pre-qualified consumers can spend up to $17,500 for goods or services. Affirm doesn’t charge interest for its pay-in-four model, but it will charge anywhere from 0% to 36% APR if you opt for monthly installments.
Affirm does not charge late fees. If a payment has not been made for 120 days after the due date, Affirm may either send the debt to a collection agency or charge off the loan. Charge-offs lower credit scores as they are reported to the credit bureaus.
2. Best for Payment Flexibility: Afterpay
Afterpay can be used for purchases from thousands of fashion, beauty and home brands. Afterpay doesn’t charge interest on short-term loans, only on longer monthly repayment plans. If you opt to pay in four installments, you can move the due date of an eligible payment through the Afterpay website or mobile app.
Afterpay charges late fees that can amount to up to 25% of the order value. If a payment is missed, the account is frozen until the account is caught up. Afterpay does not report late or missing payments to credit reporting agencies.
3. Best for Getaways: Uplift
Designed for travelers, one can book flights, resorts, cruises and even expeditions with this buy now, pay later option. Approval occurs at checkout when you shop at any of its partners’ websites.
There aren’t any late fees or prepayment penalties. For payments that are more than 30 days late, the account is frozen until back payments are made. Late payments are reported to credit bureaus.
4. Best for Bills: Zip
You can use the Zip app or Chrome extension forshopping, travel and fitness classes. Additionally, you can use Zip to pay your bills for certain insurance, TV, internet and mobile service providers, such as Verizon, T-Mobile, Sprint, AT&T, Spectrum and Allstate.
An initial payment is made at the time of purchase,and the other three payments can be paid over six weeks. Zip allows customers to use Apple Pay to pay off their loans without incurring a fee.
With Zip, you can move a payment date for the first time in a calendar month without incurring a fee. After that, you’ll incur a $2 fee if you move a payment date again within the same month.
Zip charges a minimum of $4 in total installment fees ($1 per installment) for transactions, depending on the amount of your purchase. It also charges late fees ranging from $5 to $10, depending on which state you live in.
5. Best for PayPal Users: PayPal Pay in 4
To use PayPal Pay in 4, customers must have or create a PayPal account. The maximum amount of a loan is $1,500, and the first payment is made during the initial transaction. Other payments are made every two weeks.
Payments are automatically deducted from the credit card, debit card or bank account associated with the PayPal account to ensure repayment of the loan. If you choose to pay off the balance of your loan early, you can do so without penalty.
6. Best for Improving Credit: Sezzle
Sezzle will report your payments to credit bureaus if you enroll in Sezzle Up, making it possible to improve your credit score by making payments on time. The platform uses the classic pay-in-four model.
Sezzle does charge a fee for failed payments that are not resolved within 48 hours.Additionally, it offers the option of rescheduling a payment for free once per order — or twice if you’re enrolled in Sezzle Premium.After that, you’ll incur a fee if you reschedule a payment again for the same order.
With over 500,000 merchant partners, Klarna can be used online and in stores. It doesn’t charge interest with its pay-in-four loan, but it will charge anywhere from 0% to 29.99% APR for loans ranging in length from six months to two years. If you opt for the pay-in-four plan, Klarna will run a soft credit check.
If the load is not paid off, Klarna will use a debt collection agency. When an agency is used to collect payment, it will contact the credit bureaus.
How Do Buy Now, Pay Later Apps Work?
Before buying, consumers download one of the BNPL apps. Most shoppers are approved for the loan at checkout. After approval, the buyer makes a small initial payment, and then the balance is typically paid off in three additional installments.
What To Consider Before Using Apps Like Klarna
Buy now, pay later apps like Klarna can help you break down large purchases into manageable payments. However, it’s important to keep in mind that if a shopper doesn’t keep track of their purchases and payment schedules, they can end up in debt.
When BNPL apps determine who can use their services, they run a soft credit check. It is only when payments are late or delinquent that they contact the credit bureaus. This in turn will affect credit scores.
Information is accurate as of May 22, 2023.