Klarna vs. Affirm: Which Buy Now, Pay Later Service Is Best?

Klarna vs. Affirm

Klarna vs. Affirm: Which Buy Now, Pay Later Service Is Best?

Buy now pay later (BNPL) services are a type of consumer credit that got going in the nineteenth century. Modern fintech companies like Klarna and Affirm tweaked the original deals and aimed these short-term loans at folks who want to shop without the credit card fees.

While these services are similar in many ways, differences could make you prefer one over the other. Let’s see who wins the Klarna vs. Affirm battle.

Klarna vs. Affirm: Side-by-Side Comparison

Year founded20052012
HeadquartersStockholm, SwedenSan Francisco, California
AvailabilityEurope, North America, AustraliaNorth America, Australia
Financial productsPay in 4, Pay in 30 days, monthly financingPay in 4 monthly payments
Pay in 4 purchase limits$35 to $1,000$50 to $17,500
Monthly financing limitsNo set limitUp to $17,500
Amount due at purchase0 to 25%0 to 25%
Purchase typesIn-store, online, in-appIn-store, online, in-app
CardsPhysical and virtualPhysical and virtual
Financing interest rates0 to 29.99%0 to 36%
Late fees$7 or 25% of the installment amount, whichever is lowerNo late fees
Credit checksVary by loan typeVary by loan type
Savings accountYes, on selected marketsYes

Affirm vs. Klarna: What’s the Difference?

Founded in 2005 in Sweden, Klarna is a European fintech behemoth and one of the fastest-growing BNPL services in the world. The company emerged at a time when online payments weren’t protected by advanced safety protocols, and shoppers were hesitant to share their card details online.

With its buy now, pay later (BNPL) attitude, Klarna brought a new level of trust to the market. Since its launch, the company has evolved into a fintech centered on offering short-term loans to consumers worldwide.

The same model has been followed by numerous other companies, including Affirm, which was launched in 2012 by a group of finance experts — including Max Levchin, the co-founder of PayPal.

Primarily serving the North American market, Affirm’s Pay in 4 follows Klarna’s model. However, additional financial products prove that Affirm isn’t a Klarna copycat. The service comes with its own pros that set it apart from the Swedish brand.

BNPL Products

Klarna and Affirm emerged as BNPL companies, and those services are the primary focus of each brand. With some extra years of experience compared to Affirm, Klarna proposes more ways to pay for your purchases.


The most popular product is undoubtedly the Pay in 4. This service allows consumers to pay for their goods in four bi-weekly installments. The first payment — equivalent to 25 percent of the total amount — is charged when the order is shipped.

The remaining amount is divided into three equal installments, which are collected every two weeks. Klarna charges no interest if the debt is paid on time and, within six weeks, you are debt-free.

klarna vs. affirm
With over 34 million users as of February 2023, the U.S. represents Klarna’s largest market by revenue.

Another popular product is the Pay in 30 days. This service is ideal for shoppers who want to try the merch before buying. You won’t be charged anything for 30 days, so you have enough time to receive your order, try the products, and return what you don’t like.

While some retailers don’t offer this option, most fashion brands allow you to try it before you buy. If you want to keep some items and return others, Klarna deals with the return for you and calculates the amount due based on what you actually purchased.

For larger orders, the Swedish fintech — which has been a fully licensed bank since 2017 — offers financing options to eligible consumers. With this option, Klarna gives you the possibility to divide the amount into up to 36 monthly installments.


Similar to Klarna, Affirm’s primary product is the Pay in 4 service. This credit line is offered to prequalified shoppers and works like Klarna. The first payment is due on purchase; then, the three subsequent payments are charged every two weeks.

Affirm doesn’t offer Pay in 30 days, but you can opt for monthly payments on larger purchases. Depending on the amount, the term can vary from three to 48 months.

Unlike Klarna, Affirm is not a fully licensed bank. However, it does offer bank financial services through its partner, the Cross River Bank. Beyond loans, a sought-after product is the high-yield savings account that is simple to open, comes with no minimum deposit, no fees, and an annual interest rate (AYR) of 3.75 percent.


For a long time, services like Klarna and Affirm were only available online from participating retailers. Today, both services can be used for in-store, online, and in-app purchases at all retailers with a card.

Both Klarna and Affirm offer virtual and physical cards to their customers. The former is typically used for online shopping, but you can add it to your Google Wallet and use it in-store wherever Google Pay is accepted. Klarna also works with Samsung Pay and Apple Pay.

Likewise, Affirm’s cards are compatible with most mobile wallets. The physical cards from both providers can be used for both in-store and online purchases (much like any other card) or for payments through third-party providers, such as PayPal.

While both services are similar, Affirm wins this round by partnering with more apps. For instance, you can top up your Venmo account with an Affirm card, but PayPal’s subsidiary doesn’t accept payments from Klarna — nor does Klarna accept payments through Venmo accounts.

Purchase Limits

One of the main differences between Klarna and Affirm is how much (or little) you can spend. Klarna’s Pay in 4 limits vary from $35 to $1,000. However, retailers can set their own limits within the threshold, and some could even exceed the upper limit.

Short-term, pay-monthly loans come with no real limit, but the company doesn’t usually approve purchases over $10,000. Affirm makes its upper limit clear — $17,500. This limit applies to all BNPL products, including the four-installment option and the monthly payment variant.

The lower threshold is $50. This makes Affirm a better choice for larger purchases and Klarna a better option for small splurges.


Another difference between Affirm and Klarna is the availability of each service in various geographic areas. Affirm is an American fintech company mostly focused on the U.S. and Canada.

Its services are also offered in Australia, but the rest of the world is not covered. This means that you can only open an account and use their services if you are a resident of one of the served countries.

klarna vs. affirm
Affirm reportedly aims to make the banking industry more accountable and accessible to consumers.

Retailers partnering with Affirm must also have a presence in one of the mentioned countries. However, you can split payments made elsewhere in the world when paying with your Affirm card.

Klarna was born in Sweden. It is now available in 18 countries worldwide, including the USA, UK, Australia, and Canada. The service works in a way similar to Affirm in that users must be residents of one of the covered countries. However, you can use your Klarna cards for international purchases, even in countries where Klarna is not yet present.

Late Payment Policies

What really makes a difference in the Klarna vs. Affirm battle is the way each company deals with late payments. Klarna charges fees for late payments or entire payments missing after a purchase. The fee is either $7, or 25 percent of the amount due, and is charged if the missed payment hasn’t been issued for 10 days after its due date.

Affirm doesn’t charge any late payment fees. However, you won’t be able to use the service again until you’ve paid your debt in full. Missed payments might also be reported to the credit bureaus, so it is in your interest to cover any missed payments as soon as possible.


Designed as a solution for shoppers to split the bills, Klarna and Affirm credit lines are easier to access than loans from banks. However, this doesn’t mean that everyone gets approved.

To be eligible for Klarna, you must be at least 18 years old and have a bank account or a valid credit or debit card to link to your account. You must also be a resident of the country where you want to open the Klarna account, have a positive credit history, and be able to receive notifications via text.

Klarna runs a soft credit check before approving your credit line for the Pay in 4 or Pay in 30 days, which won’t impact your credit score and won’t be visible on your credit report.

A hard credit check is run when applying for a larger loan or monthly installments. Bad credit could reduce your chances of getting approved. But if you have no credit history, linking a bank account rather than a payment card to your Klarna account could work.

Similar conditions apply to Affirm. Users must be at least 18 years old and residents of the USA, Canada, or Australia. Like Klarna, Affirm runs a soft credit check to approve lower credit lines.

Larger loans require a hard credit check. No credit history could impact your eligibility, but you can build trust by starting with smaller purchases and making all payments on time.


Online payments and payments through third-party apps have become increasingly popular in recent years. Most of these services are incredibly secure, but you might have concerns when using a new service. However, there is nothing to worry about when purchasing through Klarna or Affirm.

Klarna is secured by Sofort GmbH, one of the safest online payment systems on the internet. The service is so secure that Sofort commits to reimbursing all end customers who might suffer financial losses due to safety breaches or the misuse of login details and confirmation codes routed via their system.

Affirm works in a way similar to mobile wallets. The company uses encryption keys and multi-factor authentication. Your bank or card details are never shared with retailers; the company acts as a shield between your data and third parties. Moreover, data can only be accessed by authorized personnel.

Klarna vs. Affirm: 7 Must-Known Facts

  1. Klarna is one of the first BNPL services launched by modern fintech companies. It has been around for over 18 years and is currently available in 18 countries.
  2. Affirm is an American fintech company offering BNPL services and saving accounts. It was launched in 2012 and is currently available in three countries.
  3. Klarna’s financial products include Pay in 4 (four installments over six weeks), Pay in 30 days (no upfront payment, only pay for what you keep), and monthly installments.
  4. Affirm’s financial products include Pay in 4, monthly installments, and savings accounts.
  5. Both Klarna and Affirm charge interest on mid-term loans. Klarna’s interest rates can go as high as 29.99%, whereas Affirm’s top up at 36%.
  6. Monthly installment terms range from 36 months to 48 months for Klarna and Affirm, respectively.
  7. Both companies run soft credit checks for small credit lines and hard credit checks for larger loans. Linking your bank account to the desired service can increase your chances of getting approved if you have little to no credit history.

Klarna vs. Affirm: Which One Is Better? Which One Should You Use?

From an objective standpoint, Affirm might be your best bet. The Californian fintech company offers short or mid-term payment solutions similar to Klarna, but it has a higher max limit. You won’t be charged any late payment fees, either, even though missing payments could result in a negative record on your credit report.

Another of Affirm’s strong points is the savings account that you can use to earn interest. However, you might be charged a higher interest on loans.

Klarna might charge late payment fees, but its interest rates, which may apply to longer-term loans, are lower. Klarna is also the best option if you don’t care much about splitting your bill but would rather postpone the payment for 30 days so that you can try the products and only pay for what you keep.

Frequently Asked Questions

Is paying with Klarna a good idea?

Paying with Klarna is a good idea if you want to split your payment without worrying about interest and fees. This service is a valid alternative to credit cards, and it could actually help you reduce your credit card debt.

Is Affirm legitimate?

Yes. Affirm is one of the leading BNPL companies in North America. The service is safe to use, and, like Klarna, it charges no interest on short-term credit lines.

Is Klarna just a credit card?

Klarna is not a credit card, it is a BNPL company. The cards it offers may be used for online and in-store purchases in a way similar to your credit card, but they are linked to your Klarna account and apply the same purchase conditions (no interest on short-term credit lines and zero to 29.99% interest on monthly payments, depending on retailer and term). 

How do you qualify for Affirm?

To open an account with Affirm, you must be at least 18 years old and a US resident with a social security number. You must have a bank account or valid bank card that you can link to your Affirm account. You must also have a US phone number that receives texts and a positive credit history.

Does Klarna charge a fee?

Klarna charges no fees for its short-term payment options, but interest may be charged on longer-term loans. There are no monthly or annual account maintenance fees and no fees for using the Klarna cards.

Does Affirm count as a loan?

Yes. Affirm provides eligible customers with short or mid-term credit lines, which are basically flexible loans. This means that your positive or negative payment history and credit use may be reported to the credit bureaus, with positive or negative outcomes on your credit record.

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