Example Fixed Sum Loan Agreement regulated by the Consumer Credit Act 1974

This agreement for fixed sum credit (“Agreement”) is made between Klarna and you to finance a purchase that you pay for with credit under the Agreement (“Klarna Credit”) from a supplier who accepts this payment method (“Supplier”). This Agreement will be made and come into force after you have electronically signed this agreement form, and if we accept your application for credit and give you written confirmation that the Agreement has been made and once the purchased goods/services have been confirmed by the Supplier.

1. Your use of the Klarna Credit 

We will provide you with credit on the terms set out in this Agreement by allowing you to pay for a purchase made from a Supplier (“Purchase”). When you make a Purchase, we will pay the Supplier and you will repay us in accordance with the terms of this Agreement. 

2. Interest 

For a Purchase made, the "Transaction Date” is the day when the goods are dispatched by the Supplier or, for a service, when the service is made available to you by the Supplier. Interest is charged, starting on the Transaction Date, on the balance outstanding. 

3. Your repayments and statements showing payments owing under the agreement 

You are responsible for repaying all sums due to us by way of repayments as set out above. You must pay at least the agreed minimum monthly payment towards repayment of the full balance of the credit each month, plus any late payment fees, paper statement fees, debt collection fees incurred in that period. You can always pay more than the minimum monthly payment.  

The minimum monthly payment must reach us by the payment due date. If you fail to make the minimum monthly payment, we may charge a late payment fee of £12. 

You have a right to receive, upon request, and free of charge, at any time throughout the

duration of this agreement a statement in the form of a table showing:

a) the details of each repayment owing under this Agreement together with their due dates;

b) the amount and any conditions relating to the making of the repayment; and

c) a breakdown of each repayment, setting out how much of the repayment is made up of the amount borrowed, interest on the amount borrowed and any other charges (if applicable).

4. Early Repayment 

You have the right to repay all or part of the credit early at any time at no extra cost. Early repayment can be made via the Klarna application or by contacting Klarna by e-mail to customer@klarna.co.uk, or by telephone 0808 189 3333 (free from landlines) or 020 3005 0833 (local rate). If you make a partial early repayment the amount of your loan will be reduced. We will let you know the balance outstanding upon request. 

5. Our right to terminate this Agreement 

We may terminate this Agreement and require you to repay us the outstanding balance for any of the following reasons:

a) You fail in material respect to keep any part of this Agreement; 

b) We suspect unauthorised or fraudulent use under the Agreement or you have given us information that is inaccurate or untrue; 

c) You become incapable in law of managing your affairs or you die; 

d) You fail to make any payment which falls due to us under this Agreement or under any other agreement that you may have with us when that payment falls due; 

e) We believe that there is a significantly increased risk that you may not be able to fulfil your duty to repay the credit in accordance with this Agreement (this includes situations such as you going bankrupt or having similar proceedings taken against you); 

f) We reasonably believe the transaction would damage our reputation; 

g) You are subject to a court action which has an effect on this Agreement; or 

h) There is any other objectively justifiable reason. 

If we decide to terminate this Agreement, we will give you notice as soon as practicable.

6. Our right of set-off 

If we owe you any money we will be entitled to set-off the sum we owe you against any debt you owe us under this Agreement. 

7. Fees 

We may charge the following fees:

- Up to £12 if you do not make your payment on time (“Late Payment Fee”); 

- £1.49 for each paper statement fee ("Paper Statement Fee"); 

- The reasonable cost of sending you a letter about your outstanding debt when you are in arrears (“Debt Collection Fee”). 

Any fee which becomes payable under this Agreement will be added to the balance on the payment date following the month in which the fee became payable. We may start charging interest at the standard rate on Late Payment Fees and Debt Collection Fees on the 29th day after we have given you notice that the fee has become payable. 

8. Changes to this Agreement 

We may change the interest rate and/or fees or charges payable under your Agreement to take account of changes in the cost of providing credit to you or to reflect the cost of any system or product development. We may also change and add to the other terms of this Agreement to respond to changes in legal or other regulatory requirements or to reflect new industry guidance or codes.

Our power, under this term of this Agreement, to vary any fees or charges includes the power to remove or add fees or charges for the reasons given above without first obtaining your consent. We will give you written notice of any such change and the change will come into force 60 days after the notice has been sent. You may end this Agreement if you do not want the change to apply to your Agreement. 

9. Right of withdrawal 

You have a right under the Consumer Credit Act 1974 to withdraw from this Agreement without having to give any reason. To exercise your right of withdrawal you must give notice of your intention to withdraw from the Agreement before the end of 14 days beginning with the day after the day on which you receive a copy of the Agreement signed by us, unless you have received an earlier copy, in which event the 14 day period will begin on the day after the day you receive our written confirmation that the Agreement has been made on the same terms as set out in the earlier copy. You must give notice of withdrawal by telephone or in writing to our business address or by email (please see our contact details at the beginning of this Agreement). You must repay the amount of credit provided under this Agreement, together with any interest accrued from the date the credit was provided to the date you repay it, without delay and no later than 30 calendar days after giving notice of withdrawal. Interest will be charged at an amount of £X per day. You must make payment to Klarna by calling +44(0)203 005 0833 and paying by debit card or by bank transfer in accordance with the instructions given to you. If you withdraw from the Agreement leaving sums outstanding we will notify credit reference agencies. Please note that withdrawing from your Agreement with us will not terminate your purchase agreement with the Supplier. Your rights in relation to your agreement with the Supplier is governed by that agreement and the legislation relating to it. 

10. Consequences of default and missed payments 

If at any time, your payment is overdue, we may serve a default notice on you, requiring that you bring the payments up to date. If you then fail to do so, we may, by giving you written notice, terminate the Agreement and/or require that you make immediate repayment of the outstanding balance of credit, interest and any fees. After termination under this clause 10, we may employ a debt collection agency to recover the outstanding debt and you will have to pay reasonable costs incurred by the debt collection agency for this purpose. 

Missing payments can have serious consequences for you and may result in you paying more interest than originally calculated over the term of this Agreement. Your credit rating may be affected which will make it more difficult or more expensive for you to obtain credit in the future. Legal action may be taken against you to recover the debt. 

11. Consent to electronic communication, correspondence and change of details 

When you give your consent to us sending electronic communications to the e-mail address or telephone number you have provided, you agree that we may send statements, notices and other communications under or in relation to the Agreement (other than communications that are required by law to be sent in paper form) via email to this e-mail address or via text message to this mobile phone number. You must promptly inform us of any changes to your name, address, email or telephone number. You must provide any evidence of such changes that we may reasonably require. All communication between you and us in relation to this Agreement shall be in English. 

12. Assignment 

You may not transfer or assign any rights or obligations you have under this Agreement without our prior written consent. We have the right to transfer or assign this Agreement or any right or obligation under this Agreement at any time without your consent, provided that such transfer does not alter your rights and obligations under this Agreement to your detriment. 

13. Our liability to you 

You may have the right to sue a Supplier or us or both if you have received unsatisfactory goods or services paid for under the Agreement costing more than £100 and not more than £30,000. Except for that right in respect of misrepresentation or breach of contract relating to your agreement with the Supplier, we shall not be liable to you for any loss of profit, goodwill, business, revenue, data, anticipated savings or other loss or damage which does not arise directly from a breach of this Agreement by us. Nothing in these terms and conditions excludes or limits liability for death or personal injury caused by negligence, fraudulent misrepresentation, or your statutory rights as a consumer, or any other liability which may not otherwise be limited or excluded under any applicable law.

14. Our use of your personal data 

Klarna processes your personal data in order to carry out our obligations in this Agreement and for the additional purposes set out in our Privacy Notice. The Privacy Notice is available here, and on our website, and by using Klarna’s services you confirm that you have read this Notice. We process your personal data for example to identify you and perform customer analysis, credit assessments, marketing, and business development. We may also transfer your data to selected partners (such as credit reference bureaus), which may be established outside of the UK. In the Privacy Notice there is more information about our data sharing, your rights in regards to your data, how you may contact us with questions, or submit a complaint to an authority. 

For information about what data we transfer to credit reference agencies, and for what purposes, please refer to clause 15 below and to the Privacy Notice. 

15. Information to and from credit reference agencies 

When you apply for a fixed sum loan, we make a full credit search with credit reference agencies who will supply us with credit information. The agencies will record details of the search, which can be seen on your credit file, whether or not credit is granted. This record will also be visible to third parties and may affect other organisations’ future decisions on whether or not to provide you with credit. We will report information to credit reference agencies about the payments you make, and about any payments that you fail to make on time. If we do not grant your credit application, you will receive a failure notice from us. If our decision not to grant your application for credit is based on information supplied by a credit reference agency, we will provide you with details of the agency via email. 

16. Supervisory authority 

Klarna Bank AB UK Branch, is a branch of Klarna Bank AB which is authorised and regulated by the Swedish Financial Services Authority.  Deemed authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website. Klarna Bank AB UK Branch’s establishment number is BR020956 and is located at 125 Kingsway, Holborn, London, WC2B 6NH, United Kingdom, with FCA reference number 536065. Klarna Bank AB’s headquarters are located at Sveavägen 46, 111 34 Stockholm, Sweden, registered in the Swedish Commercial Register under registration number 556737-0431.

17. Complaints 

If for some reason you are dissatisfied with our services, we will do our best to resolve the matter as soon as possible. You can reach us via email, letter or phone at the addresses/numbers provided in the beginning of this Credit Agreement. You can also reach our customer service agents via our online chat service (https://www.klarna.com/uk/customer-service) at business hours. If we do not resolve your complaint to your satisfaction, you have the right to refer your complaint to the Financial Ombudsman Service by calling 08000234567 or using the online form available at https://www.financial-ombudsman.org.uk/contact/index.html or writing at Exchange Tower, Harbour Exchange, London, E14 9SR.

18. Governing law 

This Agreement is governed by the laws of England and is subject to the non-exclusive jurisdiction of the courts of England and Wales. If you are a resident of Northern Ireland you may also bring proceedings in Northern Ireland, and if you are a resident of Scotland, you may also bring proceedings in Scotland. 

19. General 

If at any time we allow any time for remedy of a breach, or if otherwise we do not insist on our strict rights under the Agreement, this will not prevent us from insisting on our strict rights on another occasion. If we agree to a variation on one occasion, it does not mean that we must agree to it on another occasion. 

Any provision of this Agreement which expressly or by implication is intended to come into or continue in force on or after termination of this Agreement shall remain in full force and effect. 

This Agreement does not affect or exclude any term implied by law unless it expressly says so. If any term in this Agreement shall not be enforceable, it will not affect the enforceability of all other terms. 

If your application for a fixed sum loan from Klarna is approved, you will receive confirmation from Klarna and you will be able to finalise your purchase with credit. You will receive a copy of your credit agreement via email, or to your home address if we are unable to deliver the credit agreement to you via email, and an email with further inormation. 

There is a requirement under UK law to withhold tax due on the payments but you will not need to do this or take any action based on the arrangement we have with HMRC. If you have any doubts or queries as to these arrangements, please contact HMRC. 

By clicking “I sign the agreement”, I [Name] confirm that I wish to be bound by the terms of the Agreement and consent to a credit check being carried out to assess my eligibility.

Also, I agree to receiving communication relating to this Agreement to [phone number] and [email].