Apple Upgrade Swaps iPhone Financing for Klarna-Backed Leasing in the US
Apple is due to open a new device leasing scheme called Apple Upgrade to US customers today, and the same day it is expected to close new sign-ups to the iPhone Upgrade Program it has run for roughly a decade. The replacement is financed by Klarna and is structured as a lease rather than a loan, which changes who owns your iPhone while you are paying for it.
One important caveat before the details: as of the time of writing, Apple has not published anything about Apple Upgrade, and its iPhone Upgrade Program page is still showing a "Join now" button and quoting 24-month, 0% APR terms through Citizens Bank. Everything below rests on reporting rather than an official Apple announcement, so treat the specifics as strongly reported but not confirmed by Apple.
Lease, not instalments
The current iPhone Upgrade Program is a loan. You borrow the cost of the phone at 0% over 24 months, AppleCare+ is folded into the monthly figure, and the handset is yours once the payments end. Trading up after 12 payments is the headline perk.
Apple Upgrade works the way a car lease works. Klarna, not you, is reported to hold ownership of the device for the duration of the term. That is what allows the monthly payment to be lower — you are paying for use over a fixed period rather than paying off the full retail price.
At the end of the term, reports describe three routes: hand the device back, pay a further amount to keep it outright, or move onto a newer model. Paying off early or switching models mid-term is possible, though some of those transactions are said to carry an extra fee.
Terms and what is excluded
The reported shape of the programme is straightforward, and the term length depends on the product:
- iPhone and Apple Watch — 24-month terms.
- iPad and Mac — 36-month terms.
- Approval — a soft credit check run by Klarna, which does not affect your credit score.
- Where — the US only at launch, through Apple's retail stores and its online store.
Not everything in the catalogue qualifies. The cheaper end of each product line is reported to be excluded, specifically the Apple Watch SE, the entry-level iPad, the iPhone 16 and the MacBook Neo. Business and education purchases are also said to fall outside the programme.
The other omission matters more than it sounds: AppleCare+ is not expected to be bundled into the monthly payment the way it is in the iPhone Upgrade Program. If you were treating that programme as a phone-plus-insurance package, the comparison is not like for like, and you would need to price cover separately. Apple has been reshaping its cover options anyway — the subscription tier recently expanded outside the US.
What existing members should do
Nothing, for now. People already enrolled in the iPhone Upgrade Program are reported to be able to see out their current term on the existing arrangement, including the usual upgrade eligibility once enough payments have been made. The change affects new enrolments.
If you have been intending to join the old programme, the practical takeaway is that the window is reported to be closing today. Whether that is worth rushing depends on how much you value ending the term owning the phone, and on how AppleCare+ pricing lands once it is unbundled.
Why now
The timing lines up with a broader squeeze on hardware pricing. Memory costs have climbed sharply through 2026 and are already feeding into handset prices across the industry, including Google's Pixel line. A lower advertised monthly figure is an effective way to keep upgrade cycles moving when sticker prices are rising.
For buyers, the trade is fairly clear. Lower monthly cost, no ownership at the end unless you pay more, and insurance priced separately. That is a genuinely different proposition from the programme it replaces, and worth reading closely rather than assuming it is the same deal under a new name.
If you are simply keeping your current handset for another year, the more immediate thing to install is the latest software release, which shipped with a large batch of security fixes.
Frequently Asked Questions
What is Apple Upgrade?
Apple Upgrade is a device leasing programme financed by Klarna, reported to launch in the US on 28 July 2026. It covers most iPhone, iPad, Mac and Apple Watch models, with the customer paying a monthly amount for use of the device rather than paying off its full price. Apple had not published official details at the time of writing.
Is the iPhone Upgrade Program ending?
New sign-ups are reported to close on the day Apple Upgrade launches, while people already enrolled can finish their existing term. The older programme is a 0% APR loan over 24 months through Citizens Bank with AppleCare+ included in the monthly cost, and it ends with you owning the phone.
Do you own the iPhone at the end of an Apple Upgrade lease?
Not automatically. Klarna is reported to hold ownership during the term, and at the end you can return the device, move to a newer model, or pay an additional amount to keep it. That is the main structural difference from the financing programme it replaces.
Which devices are excluded from Apple Upgrade?
The cheaper models in each line are reported to be ineligible, specifically the Apple Watch SE, the entry-level iPad, the iPhone 16 and the MacBook Neo. Business and education purchases are also said to be excluded. Terms run 24 months for iPhone and Apple Watch and 36 months for iPad and Mac.
Does Apple Upgrade include AppleCare+?
Reports indicate AppleCare+ is not bundled into the monthly payment, unlike the iPhone Upgrade Program. If you want accidental damage and hardware cover, you would need to buy it separately, which makes a direct monthly comparison between the two programmes misleading.
