Our Top Pick: Apple Upgrade Leasing With Klarna
Apple’s Klarna leasing program, branded as Apple Upgrade, is a subscription-style way to access iPhones, iPads, Apple Watches, and MacBooks with lower monthly payments than traditional financing, but it keeps you in a long-term cycle of fees and adds damage liability because you don’t own the device at the end of the term. For most people who upgrade their iPhone regularly and value predictable monthly costs over ownership, Apple Upgrade is the best overall choice among Apple’s current phone financing options. It offers 24‑month leases for select iPhones and Apple Watches and 36‑month leases for MacBooks and iPads, with flexible options to return, upgrade, or pay a final amount to keep the device. If you upgrade every year or two, this program is designed for you; if you keep devices for four to six years, you should avoid it.
Apple Upgrade launched on July 28 as a partnership between Apple and buy now, pay later platform Klarna. It replaces Apple’s earlier iPhone Upgrade Program, which was a zero‑interest installment loan that led to full ownership after 24 months. Now, rather than paying off the entire device over the term, you pay a lower monthly lease that covers only part of the hardware cost, then decide whether to return it, upgrade, or pay a “Purchase Option Fee” to own it. According to one detailed breakdown, leasing an iPhone 17 Pro 256GB that sells for USD 1,099.99 (approx. RM5,060) starts at USD 31.99 (approx. RM147) per month, totalling USD 767.76 (approx. RM3,535) over 24 months before any final purchase amount.
How Apple Upgrade Leasing Works – And Where Klarna Fits
Under the Apple leasing program, you select an eligible device—currently the full iPhone 17 line, certain Apple Watch models, plus iPads and MacBooks—and commit to a fixed lease term. iPhones and Apple Watches are leased for 24 months, while MacBooks and iPads run on 36‑month terms. During this period, you pay Klarna a monthly fee for the hardware and can usually trade in a previous device to lower your lease payment. Eligibility depends on a Klarna credit check, and iPhones must be activated on AT&T, T‑Mobile, or Verizon when you enroll. This structure sits alongside carrier financing plans and outright purchases as a third major path in the landscape of phone financing options.
The draw is price. Starting lease prices are listed at USD 17.99 (approx. RM83) per month for iPhones, USD 11.99 (approx. RM55) for iPads, USD 11.99 (approx. RM55) for Apple Watch, and USD 24.99 (approx. RM115) for MacBooks, varying by model and credit profile. Klarna states there is no interest and no late fees for this program. If a payment fails, Klarna retries and then charges a backup method; multiple failed attempts can lead to debt collection and a negative credit report. At the end of your lease, you must choose to return the device, pay off the balance and keep it, or upgrade; if you don’t decide, Klarna automatically extends the lease for up to six months and may raise your payment as promotional credits expire.
Leasing vs Buying: When The Math Favors Apple Upgrade
Leasing shines when you know you’ll move on from a device quickly. A smartphone can easily last four to six years, but Apple Upgrade is designed to make upgrading more frequent by lowering iPhone upgrade costs up front. If you’re already in the habit of getting the newest iPhone every year, leasing and returning or upgrading at the end of the term can cost less than paying full price every cycle. For example, on an iPhone 17 Pro 256GB that retails for USD 1,099.99 (approx. RM5,060), paying USD 31.99 (approx. RM147) per month means you’ve paid USD 767.76 (approx. RM3,535) after 24 months, and you can simply hand it back or upgrade. For people who treat phones like subscriptions rather than possessions, that math can be compelling.
Where leasing loses is long‑term ownership. Because Apple Upgrade leases don’t cover the full hardware cost, you face a large balloon payment—the Purchase Option Fee—if you want to buy the device outright at the end. Compared with the old iPhone Upgrade Program, which charged USD 42.41 (approx. RM195) per month for a 256GB iPhone 17 over 24 months and left you owning the phone, leasing swaps higher monthly payments for lower ones and pushes ownership into an extra lump sum. Traditional carrier financing can also bundle AppleCare and annual upgrades, as one user describes buying their iPhone through T‑Mobile with a Jump subscription that includes AppleCare and yearly upgrade options. If you keep phones until they die, installment financing or upfront purchase is almost always cheaper than leasing.
| Spec | Apple Upgrade Leasing | Traditional Financing / Outright Purchase |
|---|---|---|
| Ownership at term end | No, unless you pay a Purchase Option Fee | Yes, device is fully yours when paid off |
| Monthly cost focus | Lower monthly payments, partial device cost covered | Higher monthly payments or large upfront cost, full device cost covered |
| Best for | Frequent upgraders and temporary users (students, short projects) | Long‑term owners keeping devices 4–6 years |
| Upgrade flexibility | Return or upgrade at end of term; fees for early changes | Upgrade requires new purchase or financing; trade‑in optional |
| Risk profile | Damage fees, wear‑and‑tear charges, cycle of ongoing payments | More upfront cost, but clearer path to ownership and resale value |
Hidden Trade‑Offs: Damage, AppleCare+, and The Endless Payment Trap
The biggest downside of the Apple leasing program is that you don’t own the device you’re carrying every day, and that changes the risk equation. Apple Upgrade does not include AppleCare+ by default. You must add and pay for AppleCare+ Theft and Loss separately within 60 days of the lease start. If you skip that, you are fully liable for any damage, loss, or theft. Apple warns that “you may incur damage fees if the device is…not returned in the condition required by the lease” and that losing a device without AppleCare+ forces you to pay an early termination fee or the Purchase Option Fee. There are also fees if you upgrade or terminate a lease early. In short, you share more risk with Apple and Klarna than when you own the device outright.
Another subtle risk is the automatic extension period managed by Klarna. If you do nothing at the end of your lease, Klarna continues charging you for up to six months, possibly at a higher rate because trade‑in credits only apply to the original term. If you still haven’t decided by the end of that extension, Klarna will hit you with a one‑time Purchase Option Fee to pay off the device. While there are no late fees, failed payments can be escalated to debt collection and may be reported to credit bureaus. Critics point out that, much like streaming subscriptions, this structure can “trap you” in decades of monthly payments for hardware you may never own. That’s the hidden trade‑off behind lower iPhone upgrade costs: you’re renting access rather than building equity in a device you can resell later.
Who Apple Upgrade Leasing Is Really For
This leasing model is clearly not aimed at people who buy a phone and run it for five years or more. One commentator notes they prefer to finance their new iPhone through a carrier like T‑Mobile, using a Jump subscription that bundles AppleCare, a free screen replacement, and yearly upgrade capability. If that sounds like you—someone who wants ownership plus good protection—Apple Upgrade will feel restrictive. Instead, Apple’s Klarna payment plans target users who see a phone or laptop as a temporary tool: students who need a MacBook for a specific degree, professionals on short‑term contracts, or tech fans who want the latest iPhone every cycle without committing to full ownership.
We recommend Apple Upgrade strongly for frequent upgraders and short‑term device users. If you know you’ll swap your iPhone or MacBook within two to three years and you’re disciplined enough to return or upgrade on schedule, leasing can save money over repeated full‑price purchases. However, if you tend to hold onto devices until they wear out, or if you value the ability to resell your iPhone to recover part of the cost, the lease structure—with its balloon purchase fee, potential damage charges, and ongoing payment cycle—will likely cost you more and feel worse. As a buying guide rule of thumb: if you think in terms of subscriptions, choose Apple Upgrade; if you think in terms of assets, stick to outright buying or standard financing.
- Buy the Apple Upgrade program if you upgrade your iPhone every one to two years and want lower monthly payments over full ownership.
- Skip the Apple Upgrade program if you keep your devices for four to six years and prefer owning hardware outright for long-term value.
- Buy the Apple Upgrade program if you’re a student or short‑term professional who needs a MacBook or iPad only for a 24–36 month period.
- Skip the Apple Upgrade program if you rely on bundled AppleCare and easy annual upgrades from carrier plans like T‑Mobile Jump.
- Buy the Apple Upgrade program if you’re comfortable managing lease returns, upgrades, and potential Purchase Option Fees without missing deadlines.
- Skip the Apple Upgrade program if damage fees, loss liability, and the risk of an endless cycle of payments make you uneasy about leasing your phone.
