Affirm vs Klarna – Which is best?

Before you start using Affirm or Klarna it is important to fully understand how the two payment services work, especially what costs or fees might be involved.

In this review we’ll compare both services and tell you the differences.

What are the key differences?

Affirm is a short term lender which allows you to spread the cost of your purchases over a fixed period of 3 – 36 months. Similar to a traditional credit financing the service allows you to pay off your short term loan in multiple instalments.

Klarna on the other hand are best known for their ‘try before you buy’ model of payment which lets you pay 14 or 30 days after your order is shipped. This has become increasingly popular for clothes shoppers who wish to try on purchases before paying.

More recently Klarna has introduced their own consumer financing product. Similar to Affirm, the Swedish company allows you to finance larger purchases and pay in instalments of between 6-36 months.

Both companies are competing head on in the short term lending market, however Klarna also offers interest-free payment options if you pay in 30 days are spread the cost over 4 separate payments.

Comparing costs and fees

The first rule of using either Klarna or Affirm is to be fully aware of the potential costs or fees of your purchases. We’ve compiled the need to know costs for both services below.

Best Known ForShort term financing between 3-36 monthsInterest free 30 day payments
Good ForSpreading the cost of larger purchasesTry before you buy payments on items such as clothing
Interest Rate0 – 30%0% for 30 day payments
19% for financing over 6 months
Payback PeriodShort term financing of 3, 6, 12, 18, 24 and 36 monthsPay in 14 – 30 days
4 instalments over 6 weeks
Short term financing between 6-36 months
FeesNo Late Payment FeesNo late payment fees on interest-free products
$35 late payment fees on monthly financing products
Credit CheckSoft CheckSoft Check for interest free products
Hard Check for monthly financing products
Approval TimeInstantInstant
Number of RetailersOver 3000 merchantsOver 190,000 retailers in 17 countries

Do both services do credit checks?

Depending on they type of financing you choose will impact on whether a soft or full credit check is performed. Affirm carries out a ‘soft’ credit check for all purchases made.

Klarna perform ‘soft’ checks on their interest free products but ‘hard’ credit checks if you are financing over a 6 month period.

Does a hard credit check affect my credit score?

Yes, a hard credit check also known as a ‘full’ credit check may impact your credit score. You can expect your credit score to drop between 5-10 points if a hard check is done against your name.

We recommend keeping hard credit checks to a minimum and only using them for credit purchases on large lines of credits such as car financing or mortgages.

To avoid a hard check use Affirm for any financing over 3 months. Paying on time can also help build a positive credit history.

Return or cancellation policies

A common question is, can I return my purchases made with Affirm or Klarna? Both services offer refunds and cancellations, however you may be charged interest even if the retailer offers a full refund.

Affirm does not refund any paid interest on short term financing. This is something to be aware of when purchasing. We recommend contacting the retailer as soon as you need to return to avoid paying interest. Affirm will return the principal amount between 3-10 business days after the retailer has confirmed a refund.

Klarna offers a full refund if using any of their interest-free payment options. Full refunds must be issued first by the retailer. Make sure you get in contact with the merchant as soon as you can.

So which is best Klarna or Affirm?

While both services have overlapping products the right service depends on the type of purchase you are making. We recommend using Affirm for larger purchases where you want to spread the cost over 3 months as you can benefit from interest rates as low as 0% without impacting your credit score.

If you are purchasing anything under $200 then we recommend Klarna’s interest-free options as you can spread the costs and delay payment until you are completely happy with your purchase.

If you have used either Affirm or Klarna we would love to hear your thoughts in the comments below.

4 thoughts on “Affirm vs Klarna – Which is best?”

  1. Affirm processed four payments from my debit card for December when I only authorized one. Affirm would not credit my debit card. Said they would mail a check in two weeks instead. I would recommend caution before using Affirm.

  2. I found affirm to be a helpful option when I could not purchase in cash. Rates do fluctuate but you have to remember that it is a convenient option. You pay EXTRA for convenience. There is no pre-payment penalty so if you able to pay off early do it.

  3. Affirm is the far better option in my opinion having used both.

    Both grant virtual credit cards which is my preferred option.
    Both have low interest.
    Both are convenient and have apps as well as websites (also, both push you to use the app more than the website for some reason).

    I have had 37 virtual cards from Affirm and always amazed at how low the interest is. The app and website is great with the only con being you have to get a login text code sent to your phone each time if you prefer the website which can get annoying.

    Klarna has improved, but their app is annoying. I’ve used it for a while and yet every single time I do it says it has to verify my phone number and I must click it each time. It then sends a text with a code but instantly the verify window in the app closes, thus going through this every single time.

    Affirm gives me 100% of what I need most of the time with no payments due until at least a month from applying for my virtual card. Klarna on the other hand always wants money down. I just got a $250 virtual card from them and had to put down $48 up front. Prior to that (for those thinking my credit lacked) I put in for only $28. It wanted $7 down. It totally defeats the need to use these types of places if you have to put money down. They’re meant for those times one doesn’t have available funds.

    Affirm DOES report to Experian. Only Experian which is unfortunate. They told me years ago that they plan on reporting to the others eventually but that still isn’t the case.

    Klarna does NOT report to any of the three credit bureaus, though it may report on missed payments.

    Not sure if reporting small loans is a good or bad thing because in four years of getting my 37 loans/virtual cards with Affirm, I’ve yet to see it work in my favor with my experian score. I often get 3 month terms. Such a small loan with several of them often just starting to show on my report after they’re paid in full or close to it. To a computer doing a credit check for someone I don’t think this will have either positive or negative effects but with someone such as a bank loan officer looking over your small loans may look upon them more heavily. Again, could be either good or bad. If all paid on time I see it as good, but then again then loan officer might see it as a risk. All I can give is my guess and who’s to say what one loan officer would think over another?


    I have paid off my Klarna purchases. I did return a ring to Babygold and they told me they received the ring. I bought a larger purchase from Bose and I just tried to get Earbuds for less than first purchase and denied. I don’t understand.

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