Top Pick: Buy Your iPhone Outright or With Traditional Financing
Apple Upgrade is a Klarna-backed leasing program that lets you pay monthly for iPhones, iPads, Macs, and Apple Watches over fixed terms, but you do not automatically own the device at the end and may face damage or exit fees that make it more expensive than traditional financing for many buyers. For most people, the better choice is still to buy an iPhone outright or use a standard installment plan, because you gain full ownership without balloon payments, return requirements, or leasing penalties. The new iPhone leasing program replaces Apple’s previous iPhone Upgrade Program, which used a 24‑month loan that left you with a phone you could keep when paid off. Under Apple Upgrade, you rent from Klarna, starting at USD 17.99 (approx. RM85) per month for iPhones, and must pay a purchase fee at the end if you want to own the device.
How Apple Upgrade Leasing Works Across iPhone, iPad, Mac, and Watch
Apple Upgrade leasing covers iPhones, iPads, Macs, and Apple Watches with different term lengths and conditions, making it feel more like a tech subscription than a path to ownership. iPhones and Apple Watches are leased for 24 months, while MacBooks and iPads run on 36‑month terms through Klarna. iPhone leases can also run 12 months in some cases, and require activation on AT&T, T‑Mobile, or Verizon at enrollment, with no support for prepaid or fully unlocked use. At the end of the lease you can return the device, trade up, or pay the remaining balance plus a purchase option fee to own it. According to Apple’s own explanation, “you will not own the device at the end of your lease unless you pay the purchase fee,” which is the core difference from the old iPhone Upgrade installment loan.
| Spec | Old iPhone Upgrade Program | Apple Upgrade Leasing |
|---|---|---|
| Financing type | 24‑month installment loan through a bank | Consumer lease through Klarna BNPL platform |
| Ownership at term end | You own the device after 24 payments | You do not own it unless you pay a purchase option fee |
| Typical iPhone term length | 24 months | 12 or 24 months, leasing only |
| Coverage | iPhones only with bundled device protection in many cases | iPhones, iPads, Macs, Apple Watches, AppleCare sold separately |
| Carrier requirement | Works with any carrier or unlocked devices | Requires AT&T, T‑Mobile, or Verizon; no prepaid plans |
The Hidden Costs: Damage Fees, Exit Penalties, and Automatic Extensions
The headline Apple Upgrade leasing prices look low because they spread part of the device cost over time and leave a large balloon payment due if you want to own the hardware. Leasing an iPhone 17 Pro 256GB, listed at USD 1,099.99 (approx. RM5,200), starts at USD 31.99 (approx. RM150) per month, but that lease does not cover the full price, so a purchase option fee applies at the end. The fine print also states that you must return your device in good working condition at the end of the lease or risk damage fees. AppleCare can help, but it is no longer bundled as before; it is a separate add‑on. Walk away early, terminate a lease, or upgrade mid‑term, and Apple warns of “substantial” fees that can quickly wipe out any apparent saving. Miss three Klarna payments and your lease can terminate, with the full balance immediately due.
Apple Upgrade vs Buy: Cheaper Monthly Numbers, Less Control
On paper, Apple Upgrade’s iPhone leasing program starts at USD 17.99 (approx. RM85) per month, which looks far cheaper than older upgrade plans that charged around USD 42.41 (approx. RM200) per month for a comparable device with protection bundled in. But this is not an apples‑to‑apples comparison: the lease pricing is for lower‑tier models on longer terms and excludes AppleCare entirely. Apple’s own example shows a 256GB iPhone 17 Pro at USD 31.99 (approx. RM150) per month on a 24‑month lease or USD 45.99 (approx. RM220) per month on 12 months, before tax and any trade‑in. In contrast, a traditional purchase or zero‑interest installment plan pays down the full device value, leaving you with complete ownership at the end without return obligations. With the Klarna iPhone lease, you are locked into long‑term commitments and an “automatic extension period” of up to six months if you fail to decide at term end, during which payments may increase as promotional credits expire.
Who Apple Upgrade Leasing Is For—and Why Most Should Avoid It
Apple Upgrade leasing makes sense only for a narrow group: people who value predictable access to the latest iPhone, iPad, Mac, or Apple Watch every term, accept that they do not own their devices, and are confident they will return them in perfect condition. For them, the ability to trade up regularly and spread costs can be useful. However, critics say buy‑now‑pay‑later platforms like Klarna push younger buyers with weaker credit toward extra fees and defaults, “financializing” affordability instead of lowering hardware prices. The program’s damage fees, substantial early‑exit penalties, carrier lock‑ins, and balloon purchase payments mean it can turn into what one reviewer called “an endless cycle of monthly fees for a device you don’t even own.” If you generally keep your phone four to six years or rely on unlocked devices, leasing is misaligned with how you use tech; you are better off buying outright or using simple installment financing and keeping the device at the end.
- Buy the iPhone outright or on a traditional installment plan if you keep your phones for four to six years and want full ownership with no balloon payment at the end.
- Skip the Apple Upgrade leasing program if you dislike carrier lock‑ins and need the flexibility of unlocked or prepaid service without leasing restrictions.
- Buy the Apple Upgrade lease for an iPhone if you upgrade every year or two, are comfortable returning your device in good condition, and treat hardware more like a subscription than a long‑term asset.
- Skip the Apple Upgrade leasing program if damage fees, substantial early‑exit penalties, and automatic extension periods sound confusing or risky compared with simple ownership.
- Buy the Apple Upgrade lease for a MacBook or iPad if you want lower monthly payments over 36 months and are fine paying a purchase option fee later to keep the device.
- Skip the Apple Upgrade leasing program if you prefer bundled protection like the old iPhone Upgrade plan offered and don’t want AppleCare as a separate add‑on with extra cost.
