What is Klarna?

Over the past couple of years you might have heard about this revolutionary new way to spread the cost of some purchases over a few months, but is it as good as it sounds.

Let’s understand what Klarna is first;

“Pay Later with Klarna” is a tagline they use, which effectively means you can either spread the cost over 3 interest free payments, pay up to 30 days later for a purchase or set up a line of credit on a One-time card.

They will perform credit checks on you before any purchase but imply that a credit check with a CRA (credit reference agency) will only be done if you apply for the One-time card, which means that they will do in-house credit checks for the other products, as a responsible lender.

How Much will it Cost You?

So what is the actual cost of this interest free purchasing option?

Late payment charges are up to £12

£1.49 for a paper statement

£??.?? cost for sending a debt letter to you.

The standard interest rate is 0.047 % per day, which results in an effective annual rate of 18.9 %. (“Standard Rate”).  It is charged daily on the balance outstanding of all Purchases other than Special Purchases. The Standard Rate is also charged on fees (if any) on which interest has become payable.

For more information on the Klarna agreement terms, visit them on their website at https://cdn.klarna.com/1.0/shared/content/legal/terms/0/en_gb/account_agreement/


How Much Would You Like?

Representative example: Borrow £300 over 3 months @ 292% pa (fixed) Total repayment: £457.95 in 3 monthly payments of £152.65. Representative 1261% APR.

What do People really think of Klarna?

Having looked at the reviews, posted online, from the people who have used Klarna in the past, it seems that this interest free shopping alternative isn’t as interest free as it should be!

Here are a few examples of the issues people are having which is costing them the most amount of money;


Scammers. Ordered one thing, they decided to put it through twice. Despite the orginal website showing it as just one item. Called them up to explain what happened…and they said I had to wait 10 days before filling in a form

Review left 17/12/21 on Trustpilot

Furious !!

Furious !!! Created a 1 time to pay for something and despite many attempts would not pay – so I cancelled the card but it had already taken first payment this is despite the item not being purchased and then I am told it’s up too 7 days for the refund !!

Horrendous don’t use ever they take money in a second and take days to give it back!!!

Fraudulent service and I am livid

Review left 26/12/21 on Trustpilot

Direct Debit sneaky trick

Set up a direct debit with my bank to which they took 1st payment out. After that they never took payments out and charged me for missed payments. Tried to settle balance with credit card but you can only use a debit card. There is an auto pay button but if you’re unaware you will miss your payments.

Review left 30/12/21 on Trustpilot


What is Klarna? – things to bear in mind when considering Klarna

  1. As part of their services, they offer a recurring credit line similar to that of a credit card where you can pay the minimum amount or a small amount each month which means that you could end up just paying the interest off each month and never pay of the original amount you borrowed.
  2. If you are struggling to keep on top of your finances, the temptation is always there to keep buying things on Klarna and putting yourself in further debt. With a traditional payday or short term loan you know exactly how much to pay and when it has be completed.
  3. Don’t be tempted to over borrow. If they offer you a credit line above your needs you may be tempted to use the money for trivial things and not emergencies, then regret it.

Klarna’s Fixed and representative APR are good when comparing them against some payday and short term lenders but not so good when comparing them to say a low interest credit card apr which is using the same model

How can LoanPig offer me a better service?


Take a look at the comparison chart below to see how a LoanPig short term loan compares to the rest of the payday lenders. As an existing loan customer of LoanPig’s you too may qualify for this loan product.

LoanPig 149% loans

Loanpig offer loans from £50 – £1500 over a term of 1 – 12 months, we will show you exactly how much you need to pay, on the dates you agree to, so there is no confusion over re-payments

If you have a poor credit score you may have been turned down by Klarna and LoanPig offer loans to people with bad credit ratings.


Apply Now

In Summary

There are a number of reasons why LoanPig are a better option when it comes to borrowing money for a short period but there are also circumstances where Klarna might offer you a better alternative, either way, please borrow responsibly. Only take a loan or a credit line out if you really need the money and don’t put yourself in a financial stranglehold by signing up to something you know you cannot afford.