Apple Upgrade: 20 Things to Know Before Leasing an iPhone, iPad, or Mac

Apple Upgrade, the company’s new Klarna-backed leasing program, went live on July 28, 2026, across the Apple Store online, in the Apple Store app, and at physical Apple Store locations in the United States, officially replacing both the iPhone Upgrade Program and iPhone Payments. Before you sign up, here is what the program actually involves.

What Apple Upgrade Is

Rather than financing a device you eventually own, Apple Upgrade is a true lease. You make monthly payments, and at the end of the term you can upgrade to a new device, pay it off with a one-time purchase payment, or return it and walk away. Klarna handles the financial backend, and Apple is not adding any interest or fees on top of retail pricing, so the math is straightforward.

Lease terms vary by product category. IPhone and Apple Watch are available on 12-month or 24-month terms. Mac and iPad use 24-month or 36-month terms. Monthly pricing drops considerably on longer terms, so the 12-month iPhone option costs nearly double the 24-month equivalent.

Pricing by Device

Prices for the difference lease plans and by device types are as following:

Notable exclusions: the iPhone 16, Apple Watch SE, entry-level iPad, MacBook Neo, and Mac mini are not eligible for Apple Upgrade.

20 Things to Know Before You Lease

1. It’s a lease, not a loan. You never own the device unless you make a final purchase payment at the end of the term. Monthly payments do not build toward ownership automatically.
2. Three end-of-lease options. When your term ends, you can upgrade to the latest generation, pay the remaining balance to purchase the device outright, or return it and leave the program.
3. The purchase payoff is retail price minus what you’ve already paid. Klarna charges no fee for the lease itself, so if a device retails at $1,099, your total cost to own at any point is $1,099 plus taxes, with no markup.
4. Inaction converts the lease to month-to-month. If you do nothing when the term ends, the lease rolls into month-to-month for up to six months, payments may increase, and at the end of that window you are automatically charged the full purchase amount.
5. Early exit costs the remaining balance. You can leave the program or upgrade before the term ends, but you pay whatever monthly payments are left on your current lease.
6. No interest, no fees of any kind. Apple and Klarna are not charging interest or administrative fees on top of the lease payments.
7. Trade-in value spreads across your monthly payments. If you trade in an existing device, the credit is divided across the lease term rather than applied as a lump sum up front, which lowers your monthly payment throughout.
8. iPhone leases require a major carrier. AT&T, T-Mobile, and Verizon are supported. Prepaid plans are not eligible. The iPhone itself ships unlocked, so you can switch carriers at any point during the lease.
9. Approval uses a soft credit check only. Klarna does not run a hard inquiry, so applying will not affect your credit score.
10. Apple Card earns 3% Daily Cash on lease payments. If you pay with Apple Card, the standard 3% Daily Cash back on Apple purchases applies to every monthly lease payment.
11. First payment is due roughly 30 days after delivery. Whether the device ships or you pick it up in-store, your first payment is due approximately 30 days later.
12. You are responsible for damage at return. Klarna will assess any damage when you return a device at the end of the lease, and you will need to pay for any required repairs. If you carry AppleCare+, you pay only the AppleCare+ service fee instead of the full repair cost.
13. AppleCare+ is optional and costs extra. It is not bundled into the lease price. Customers can also opt for AppleCare One if they prefer a multi-device coverage plan.
14. Klarna’s app is where you manage the lease. Your billing schedule, remaining payments, and lease details live in the Klarna app.
15. Missed payments roll forward, but three in a row ends the lease. A single missed payment carries into the following month with no late fee. Three consecutive missed payments terminate the lease agreement and the full outstanding balance becomes due immediately. iOS 27 code has already revealed that Apple can lock leased iPhones over missed payments.
16. Eligibility requirements are specific. You must be at least 18 years old (or the legal age in your state), hold a valid Social Security Number or ITIN, have an accepted credit or debit card, maintain an Apple Account in good standing, have a Klarna account, and be able to receive SMS verification codes.
17. Education pricing does not apply. Apple Upgrade cannot be combined with Apple’s education discount.
18. Refurbished devices are excluded. Apple Upgrade is available only on new devices through Apple’s standard retail channels.
19. Returns are prepaid and pre-labeled. Apple sends a shipping box with a prepaid label when you return or upgrade a device, so there is no out-of-pocket cost for shipping.
20. U.S. Only, for now. Apple Upgrade launched exclusively in the United States and there is no announced timeline for international expansion.

What Happens to Existing iPhone Upgrade Program Customers

Current iPhone Upgrade Program participants can continue making payments until their existing device is paid off. At their next upgrade, they will need to choose between Apple Upgrade, Apple Card Monthly Installments, outright purchase, or carrier financing. Apple will not automatically migrate anyone into Apple Upgrade, so no action is required until you are ready to upgrade.

The shift represents a fundamental change in how Apple monetizes hardware. The old iPhone Upgrade Program bundled AppleCare+ into payments and built toward ownership through financing. Apple Upgrade strips that out, passes Klarna the credit risk, and leaves customers with a lower monthly number that does not build equity unless they explicitly choose to buy at the end. For annual upgraders who never planned to keep a device, the math may work out fine; for everyone else, the total cost of long-term leasing is worth calculating before signing.

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