Apple unveils Klarna-Powered 'Apple Upgrade' leasing program in the US

Apple has officially revamped how American consumers purchase hardware with the launch of Apple Upgrade, a flexible device leasing program powered by fintech leader Klarna.

Replacing the long-running iPhone Upgrade Program and standard Citizens One financing, the new service extends lease-to-own options across nearly the entire product lineup, including iPhone, Mac, iPad, and Apple Watch.

How Does ‘Apple Upgrade’ Work?

The program operates similarly to an auto lease, lowering monthly upfront costs while giving buyers flexible choices at the end of their agreement. Applicants complete a quick online or in-store verification managed by Klarna, which uses a soft credit check that does not affect credit scores.

Key Features & End-of-Lease Options

At the conclusion of a lease term, customers can choose between three distinct paths:

1. Upgrade: Hand back the current device and start a new lease for the latest model.
2. Buy: Pay the remaining buyout balance to keep the hardware permanently.
3. Return: Return the device directly to Apple and exit the agreement.

If no action is taken at the end of the term, the agreement automatically shifts to a month-to-month lease for up to six months before a final buyout charge applies.

Key Differences: What’s Included (and What’s Not)

Apple Upgrade is expanding flexible payment options beyond just the iPhone, but there are a few key differences from past financing plans to note.

What’s not included: AppleCare+ protection is no longer bundled in — it has to be purchased separately as an add-on. Also excluded from the program are the iPhone 16/16 Plus, Apple Watch SE, iPad (A16), MacBook Neo, and Studio Display.

What is included: You can still earn 3% Daily Cash back on your lease payments when you use an Apple Card. And if you have an existing device, trade-in credits can be applied upfront to bring your monthly payments down.

Strategic Timing Amid Tech Cost Shifts

By partnering with Klarna, Apple delivers a lower monthly barrier to entry without taking financial credit risks directly onto its balance sheet. As component costs and flagship prices rise across the industry, the subscription-style lease model allows users to maintain access to premium Apple hardware through predictable monthly payments.