Apple launches monthly iPhone lease program with Klarna

Apple will soon let U.S. customers lease an iPhone for up to two years, with monthly payments beginning at $17.99. The service, named Upgrade, is offered through a partnership with Klarna and will be available both in Apple’s retail locations and online. After a soft credit check, shoppers can choose a one- or two-year lease for iPhones, a similar lease for Apple Watch, or two- to three-year leases for Macs and iPads.

The rollout follows Apple’s recent price increases for iPads and Macs, which the company attributed to a global memory shortage. Analysts have suggested that leasing could shift consumer focus from higher upfront costs to lower monthly payments.

"Most of Apple's consumers, especially in the U.S. and other developed markets, are buying devices on installment plans or trade-ins, so we can expect to see much more aggressive offers," said Nabila Popal, senior research director at IDC.

Leased devices must be returned at the end of the lease term, though users may purchase the device with an additional payment or upgrade to a newer model. No security deposit is required; Klarna will terminate a lease after three months of missed payments but does not assess late fees. Monthly rates vary by model, with an unlocked iPhone 17 Pro listed at $31.99 for a two-year lease and $45.99 for a one-year lease, while entry-level models such as the iPhone 16 are excluded.

The new program replaces Apple’s existing iPhone Upgrade Program, which required 24 monthly installments of over $42 and was financed through Citizens Bank. By moving to a Klarna-backed lease, Apple aims to compete more directly with carrier financing offers and to encourage more frequent device upgrades.

Apple is slated to report its third-quarter earnings on Thursday, marking CEO Tim Cook’s final earnings release before transitioning to executive chairman.