Consumers looking to soften the cost of new Apple products now have another option: the company has launched an expanded leasing program that lets customers make monthly payments on select devices instead of paying the full purchase price upfront.
The new Apple Upgrade program, offered in partnership with financial technology company Klarna, extends beyond iPhones for the first time to include eligible iPads, Apple Watches and Mac computers. The rollout follows recent price increases across several Apple product lines.
Customers can enroll online or at Apple retail stores. Lease terms vary by device, ranging from 12 or 24 months for iPhones and Apple Watches to 24 or 36 months for iPads and Macs. Applicants undergo a soft credit check through Klarna, which verifies identity without affecting credit scores.
Unlike traditional financing, the program does not charge interest. Monthly payments begin 30 days after a device is shipped or picked up, and all billing is managed through the Klarna app.
Customers can also reduce their monthly payments by trading in eligible Apple products or select competing devices, including some Google Pixel and OnePlus phones.
At the end of a lease, customers can purchase the device by paying the remaining balance, return it and upgrade to a newer model, or return it and exit the program. Those who upgrade before a lease ends must return their current device and pay an upgrade fee equal to the remaining lease payments.
The program differs from carrier financing because leased iPhones remain unlocked, allowing customers to switch wireless providers even after selecting AT&T, Verizon or T-Mobile when the lease begins. Carrier financing, by comparison, is generally tied to a specific provider and often includes promotional trade-in discounts.
AppleCare+ is not included with the lease and must be purchased separately within 60 days if customers want coverage for accidental damage. Those without AppleCare may face additional damage fees if a leased device is returned in poor condition.
Missing a payment does not trigger interest charges, but unpaid amounts are added to the next bill. After three consecutive missed payments, the lease is terminated and the remaining balance becomes due, although returning the device may reduce the amount owed. Accounts left unpaid could eventually be referred to collections, potentially affecting a customer’s credit.
Industry analysts say the program may appeal to buyers seeking lower monthly payments on increasingly expensive technology, but they also caution consumers to understand the total cost and lease terms before signing an agreement.
Source: CNN, NYT