Klarna could cost you a mortgage: Home buyers are turned down for loans after using buy now, pay later deals
Aspiring homeowners are reportedly being turned down for home loans because they used buy now and later deals.
Experts are now urging borrowers to think twice before using the convenient payment option from brands like Klarna.
Mortgage advisor Sabrina Hall, of Kind Financial Services, says a customer has been turned down after using this type of credit. The decision was reversed.
Mortgage risk: Experts urge borrowers to think twice before using the convenient ‘buy now, pay later’ checkout option from brands like Klarna
She says: ‘Looking at all lenders buy now pay later arrangements differently. My client showed many transactions on bank statements and the lender was afraid they were living beyond their means.’
A 26-year-old woman also told online magazine Refinery29 that she had been rejected by HSBC and Barclays for a mortgage on her first home for using Klarna.
Both banks deny that they will automatically reject customers who use BNPL schemes.
A Klarna spokesperson said: ‘We will be working with mortgage lenders and brokers to help them better understand how our products work.’