What is Klarna, how does the buy-now, pay-later app work and what shops are signed up to it?

Which is why buy-now, pay-later app, Klarna, may be able to help when you're buying Christmas gifts before pay day.

What is Klarna and how does it work?

Klarna is an app you can use to makes purchases without payment online at selected stores, that you then pay for later.

The company prides itself on being a simple, fair, transparent and helpful lender.

If approved after a soft background credit check, the app will allow you to buy something without spending a penny at the time and then paying it back in full at a later date.

If you are denied, this will not make an impact on your credit rating.

You can choose to repay over several months – something known as 'slice it' on the app – but a full background credit check will be needed for this feature and if you are rejected, this could affect your credit score.

Something worth noting before applying.

Once approved, your item will ship to you straight away and an email will be sent to you indicating when the payment is due.

You'll have 14-30 days (depending on the store) to decide whether you want to keep the item before being required to pay.

Once you're required to pay, you log in to your account on Klarna.com and make a debit card payment.

What happens if my Klarna repayment is late?

If your repayment is late, you will not be charged interest or penalties in the UK, but it may affect your credit score.

Klarna also has a team of staff who you can talk to about repayments if you're getting behind.

What shops are signed up to it?

A variety of shops are signed up to Klarna, including Topshop, Schuh, ASOS, Beauty Bay, Burton,  Evans, Size?, Swoon, Topman and Yours.

For a full list of retailers, click here.

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