Apple launches device leasing program with Klarna, denies planned restrictions for missed payments

Launch replaces previous financing

Apple Upgrade launched Tuesday, July 28, 2026, in the United States exclusively, partnering with the buy-now, pay-later service Klarna. The program replaces the earlier iPhone Upgrade Program and iPhone Payments, extending the leasing model to iPad, Mac, and Apple Watch for the first time. Customers apply through Apple’s online store, the Apple Store app, or physical retail locations, with a soft credit check administered by Klarna. iPhone leases require an active carrier plan with AT&T, T-Mobile, or Verizon; the devices ship unlocked.

Pricing and lease terms

Monthly payments start at $17.99 for the iPhone 17e, $22.99 for iPhone 17, $28.99 for iPhone Air, and $31.99 for iPhone 17 Pro (all based on a 24-month term). Apple Watch Series 11 and iPad Air each begin at $11.99 per month, and the MacBook Air at $24.99. Lease contracts run 12 or 24 months for iPhone and Apple Watch, and 24 or 36 months for Mac and iPad. Not every model qualifies: the iPhone 16 and 16 Plus, Apple Watch SE, iPad with A16 chip, MacBook Neo, Mac mini, and Studio Display are excluded. Over a 24-month iPhone 17 Pro lease a customer pays $767.76 but still does not own the device.

No restricted mode; Klarna’s policy on missed payments

Code surfaced last week in the iOS 27 beta hinting at an “App Managed Features” framework that could let financial partners remotely restrict a device for missed payments, but Apple told The Verge that no such feature will be activated for Upgrade.

There will be no restricted mode and/or there will be no limitations put on device functionality due to missed payments or default with the Apple Upgrade program.

Klarna spokesperson Clare Nordstrom stated the firm’s own rule: after three consecutive missed payments, the lease agreement terminates and the customer must pay the full outstanding balance.

If customers miss three payments in a row, the company will terminate the lease agreement and the customer will need to pay the full outstanding balance.

End-of-lease options and perks

When a lease term expires, users may upgrade to the newest generation, purchase the device with a one-time final payment, or return the hardware and exit the program. Apple does not disclose the purchase fee in advance. Enrolling in the program allows customers to lower monthly payments by trading in an existing device, and those who pay with an Apple Card earn 3% Daily Cash back.

Context of rising hardware prices

The leasing option arrives after Apple raised prices on Macs and iPads in response to the memory chip bottleneck known as “RAMageddon.” CEO Tim Cook recently described the component cost situation as “unsustainable,” a signal that future iPhone generations may also become more expensive. The Upgrade program offers a lower-threshold way to access Apple’s latest devices without paying full retail upfront.