Are you looking for a way to buy things online and pay for them later? You’re in the right place. In this article, I’ll compare two popular “Buy Now, Pay Later” options: Affirm and Klarna.
As a smart shopper, you want to make the best choices when spending your money.
That’s why I’ve put together this article to help you understand the pros and cons of Affirm and Klarna. I’ll talk about interest rates, fees, and how easy it is to use each service.
By the time you finish reading, you’ll have a better idea of which “Buy Now, Pay Later” option might work best for you and your shopping needs. Let’s dive in and start comparing!
Affirm Overview

Affirm is a Buy Now, Pay Later (BNPL) service that partners with retailers and e-commerce merchants to offer consumers a variety of flexible payment plans and financing options.
Affirm allows customers to split their purchases into multiple payments over time. These payment plans can range from 0% APR with no fees to interest-bearing loans, depending on the retailer and individual customer eligibility.
The service is available at various online and brick-and-mortar retailers partnered with Affirm. Customers can apply for Affirm financing at the point of sale and receive a real-time decision on their application.
Please note that Affirm is not a credit card processor but a BNPL service offering alternative payment methods to traditional credit cards.
Klarna Overview
Klarna is a Buy Now, Pay Later (BNPL) service specializing in e-commerce. The company offers a range of flexible payment options for consumers, including Pay in 4 (interest-free installments), Pay in 30 days (postponing the payment), and financing options with Klarna credit.
Klarna provides a smooth and secure consumer shopping experience, helping merchants increase sales and customer satisfaction. Founded in 2005, Klarna has grown thanks to its user-friendly interface, strong reputation among sellers, and commitment to safety and security steadily.
Please note that Klarna is not a payment processor but a BNPL service offering alternative payment methods to traditional credit cards and bank transfers.
Affirm vs Klarna: Interest Rates and Fees
The interest rates and fees for Affirm and Klarna differ in several ways.
Affirm offers a range of interest rates, including 0% APR for some purchases, depending on the retailer and individual customer eligibility. For other purchases, interest rates may vary, and the exact rate is determined when a customer applies for financing at the point of sale.
Klarna, on the other hand, offers an interest-free Pay in 4 option, which allows customers to split their purchase into four equal installments. In this case, no interest is charged if the payments are made on time. Klarna also offers a Pay in 30 days option, where customers can delay their payment without incurring interest charges. Interest rates may apply for financing options using Klarna credit and are determined during the application process.
It’s essential to note that neither company charges a flat rate of 25% per month on purchases. Interest rates and fees depend on the specific BNPL plan and the customer’s eligibility.
Affirm vs Klarna: Payment Flexibility and Options
While Affirm and Klarna offer various payment options, a few differences exist.
Affirm and Klarna allow customers to pay off their financing agreements early without penalty. With Affirm, customers can pay their remaining balance at any time, and the account will be closed once the full amount is paid. In contrast, Klarna allows customers to pay off their balance early. Still, the exact process may vary depending on the Klarna payment plan (e.g., Pay in 4 or Klarna credit financing).
This means both lenders offer flexibility in paying down loans early or making partial payments, but the exact process and features may vary. Therefore, customers should carefully consider their financial situation and preferences when choosing between Affirm and Klarna.
Affirm vs Klarna: Credit Check and Impact on Credit Score

Both companies perform a soft credit check when applying for Affirm or Klarna financing. This means they can access your credit score but not all the details of your financial situation. Soft credit checks do not impact your credit score, unlike hard credit inquiries, which may affect your score and future credit applications.
However, the statement that neither company affects your credit score in any way is not entirely accurate. While initial applications won’t impact your credit, your payment history with Affirm and Klarna can affect your credit score.
Affirm may report your payment history to credit bureaus, which means timely payments can improve your credit score, while late or missed payments can harm it. Klarna also has the potential to impact your credit score if you miss payments, which could be reported to credit bureaus and negatively affect your score.
In short, both Affirm and Klarna use soft credit checks when you apply, which do not affect your credit score. However, your payment history with either company can impact your credit score, depending on your payment behavior.
Affirm Pros and Cons
Pros:
- Affirm offers flexible payment options and financing terms, allowing customers to choose a plan that best fits their needs.
- Affirm partners with a wide range of online and brick-and-mortar retailers, providing customers with more opportunities to use the service.
- Affirm may report positive payment history to credit bureaus, which can help customers build or improve their credit score with timely payments.
Cons:
- Affirm’s interest rates for financing plans may be higher than some other BNPL services, depending on the retailer and customer eligibility.
- Not all customers may qualify for 0% APR financing options, and some may pay interest on their purchases if they don’t meet the eligibility criteria.
Klarna Pros and Cons
Pros:
- Klarna offers an interest-free Pay in 4 option, allowing customers to split their purchase into four equal payments without incurring interest charges if paid on time.
- Klarna’s Pay in 30 Days option allows customers to delay payment without interest charges, which can benefit short-term purchases.
Cons:
- Klarna’s financing options using Klarna credit may come with interest rates and fees that could make long-term purchases more expensive than other BNPL services like Affirm.
- Unlike Affirm, Klarna’s payment history may not be reported to credit bureaus, which means using Klarna might not help customers build or improve their credit scores.
Affirm vs Klarna: Which Payment Method Should You Use?
If you’re looking for a BNPL service that can help improve your credit score and offers a broader range of retail partnerships, Affirm might be the better choice.
However, if you prefer interest-free payment plans like Pay in 4 or Pay in 30 days and don’t prioritize credit-building, Klarna could be the better option. Consider your personal preferences and financial needs before deciding between the two.