Do you have a loan with Klarna, but aren’t sure if you’re able to pay it back?
The truth is, late fees are only the tip of the iceberg when it comes to the actions Klarna may take against you.
In this article, I’ll look over what typically happens when you miss a Klarna payment, or fail to pay them back entirely. I’ll also share some tips on what to do if you believe you’ll miss a payment, to hopefully avoid any negative consequences from doing so.
What Happens If You Don’t Pay Klarna?
Let’s look over what may happen if you miss a Klarna payment, or stop paying them at all.
While not all of these are guaranteed to happen, this is typically how the process goes for most users.
1. You Will Be Charged Late Fees
The first thing that will happen when you miss a Klarna payment, is that you may be charged late fees, depending on your country.
These fees can continue adding up as you continue to miss payments. While they are not very hefty on their own, they can quickly add up to a sizeable amount if you continue to miss payments.
Currently, Klarna’s late fee policy is quite straightforward – the late fee will not exceed $7, or 25% of the total loan.
Note that Klarna will automatically try to make the payment 7 days later, after the initial payment failed. Then again 7 days after that.
If they are still unable to pay the installment, it will be added onto your next installment’s bill instead.
2. Your Spending Limit May Decrease
Next, your spending limit is likely to decrease as soon as you are late with a payment.
This can happen even if you end up paying off the balance of your loan in full.
Because you were late with a payment, Klarna’s algorithm considers you to be a higher risk when it comes to loaning you money. Therefore, you won’t be able to borrow as much of it.
This is standard with other buy now pay later services like Afterpay as well, and it’s an unfortunate consequence of being late.
So, always make sure there is money in your account for your Klarna payment, as it can be difficult to get your limit raised again if you’re late with payments!
3. Your Klarna Account May Be Closed
While this won’t happen if you’re simply late with a payment, this does become a possibility if you start missing payments entirely.
It goes without saying, but Klarna is only interested in loaning to people that can actually pay back the money that was lent to them.
Once you’ve failed to pay back a loan entirely, it’s unlikely Klarna will ever want to loan to you again.
Account closures are common, and at that point you will no longer be able to use their service anymore.
4. Your Credit Score May Be Impacted
Klarna reserves the right to report to credit agencies, even for late payments.
According to their late fees page, Klarna clearly states:
“Late payments might also be reported to the credit bureaus.”
Here is where things start getting serious.
While it’s bad enough to be charged late fees or even lose access to your Klarna account, it’s considered very bad to have missed or late payments on your credit report.
The effect it has on your credit score may end up costing you much more in the future, and hurt your ability to get loans at the best interest rates.
Therefore, it’s very important that you always try to make all payments on time, and set aside extra money in case of financial emergencies.
4. Your Debt May Be Sold To Collection Agencies
Even if you don’t make your payments to Klarna, that doesn’t mean that the debit is gone.
If you repeatedly miss payments or are unable to pay at all, Klarna states that missed payments and unpaid debts are sent to collections.
Let’s face it, dealing with collection agencies isn’t fun.
And to make matters worse, having debt go to collections may also hurt your credit further, which can be difficult to recover from.
Therefore, it should be avoided at all costs. I’ll share some tips on how to work with Klarna a little later on.
Can You Go To Jail For Not Paying Klarna?
No. While having debt sent to collections is a serious event, you will not go to jail for not paying Klarna.
At worst, you can be sued by the collections agency and have a judgement against you.
This can result in your wages being garnished until the debit is repaid, or the seizure of your assets.
However, this is rare, especially for small amounts. Regardless, you will not go to jail for owing money.
Be Sure To Contact Klarna In Advance!
A lot of what’s been shared so far can seem quite scary, and overwhelming. Thankfully, it’s not all bad!
Klarna is a large company, and it’s not uncommon for people to miss payments. Financial situations change, emergencies pop up, and payments may be missed through no fault of your own.
Therefore, they have a lot of options to work with you.
First of all, you should see if you can extend your Klarna due date by following the instructions here. This can give you extra time to be able to make your payment, without incurring any fees.
Secondly, you should contact Klarna by visiting this page, then scrolling down to the bottom to access their support options.
Explain your situation, and see if there’s anything they can do to help you.
It’s possible they may be able to pause payments temporarily, or set up a new arrangement for you to work with.
Remember, Klarna is incentivized to help you pay as much as you can. If you simply can’t pay anything right now, its in their best interests to do what they can to help.
As you can see, a lot can happen if you don’t pay Klarna on time, or at all.
While at a minimum you’ll receive a late fee, it’s also possible that your debt will be sent to collections if you are unable to pay it at all. This can have serious effects on your credit score, hurting your ability to get loans in the future.
Therefore, it’s best to do whatever you can to ensure you pay on time, and contact Klarna to see if there’s anything they can do for you.
I hope that you’ve found this article to be helpful. If you have any other questions about Klarna, please ask them using the comment form below.
Wishing you the best,
– James McAllister