Apple has retired its long-running iPhone Upgrade Program and launched Apple Upgrade, a leasing service operated in partnership with Klarna. The new program covers iPhones, iPads, Macs, and Apple Watches at lower monthly rates than its predecessor, but the shift from installment financing to a lease structure changes who owns the device, what insurance costs, and how missed payments are handled.
Current members of the discontinued iPhone Upgrade Program do not need to switch immediately. They can remain on their existing agreements until their next device upgrade, at which point they must choose between Apple Upgrade, Apple Card Monthly Installments, or an outright purchase.
How Apple Upgrade Differs From the Old Program
The iPhone Upgrade Program allowed customers to pay for their device in monthly installments while bundling AppleCare+ and offering an annual upgrade path after twelve months. Apple Upgrade replaces that model with a true lease. Customers make monthly payments to Klarna, and unless they pay a final buyout amount at the end of the term, they do not own the hardware.
That final payment equals the device’s original cost minus the sum of all monthly payments made during the lease. Customers who want to upgrade instead of buying out must return the leased device in good condition.
Eligibility and Carrier Requirements
Apple Upgrade is available only in the United States. Approval requires a soft credit check, which does not affect the applicant’s credit score. There is no hard inquiry.
At checkout, customers must select a postpaid carrier from AT&T, Verizon, or T-Mobile. Prepaid plans are not supported. Despite the carrier requirement, iPhones leased through the program are unlocked, so users can switch carriers after purchase or add a second eSIM.
What the Lease Covers and What It Excludes
The program is open to most current Apple devices, though several products are ineligible. Customers cannot lease the iPhone 16, iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, A16 iPad, or Studio Display through Apple Upgrade. Refurbished units and education-discount pricing are also excluded.
Unlike the iPhone Upgrade Program, AppleCare+ is not included in the monthly lease fee. Customers must purchase protection separately, with iPhone AppleCare+ running between $9.99 and $13.99 per month. Alternatively, AppleCare One covers up to three devices for $19.99 per month. Because Klarna assesses damage fees when a leased device is returned, going without coverage could mean paying full repair costs at trade-in time. Those who do carry AppleCare+ would only owe the standard service fee for eligible damage.
Payment Rules and Consequences
Missed payments roll into the following month’s bill, and Klarna does not charge late fees. However, the tolerance ends after three consecutive missed payments. At that point, Klarna automatically terminates the lease and demands the full remaining balance immediately. If the customer returns the device, Klarna subtracts its current value from the amount owed. Failure to return the hardware or pay the balance results in the account being sent to collections.
Although code discovered in the iOS 27 beta suggested Apple could restrict apps and services on devices with missed lease payments, the company confirmed that capability is not tied to Apple Upgrade. Missing a payment will not trigger any software lockout on the iPhone itself, though it can still damage the customer’s credit score.
Klarna also imposes restrictions on which cards can be used for automatic payments. American Express, Chase, and Capital One credit cards are not accepted. The Apple Card is supported.
Trade-Ins, Early Termination, and Alternatives
Customers initiating a new lease can trade in an existing iPhone, but the trade-in value is distributed across the monthly payments rather than applied as an upfront discount. Trade-ins are not accepted when returning a device to upgrade to a new one.
Lessees can end the agreement early by paying the remaining balance and returning the device, or they can buy out the lease early without penalty. For those who prefer to own their hardware from day one, Apple Card Monthly Installments remains available with zero interest, and the device is owned outright.
Frequently Asked Questions
Is Apple Upgrade available outside the United States?
No. The program is currently limited to the U.S. market, and Apple has not announced expansion plans.
Do I own the device at the end of the lease?
Not automatically. Ownership requires paying a final buyout amount equal to the original device cost minus the payments already made. Otherwise, you must return the hardware.
Is AppleCare+ included?
No. AppleCare+ must be purchased separately. This is a significant change from the discontinued iPhone Upgrade Program, which bundled AppleCare+ into the monthly payment.
What happens if I miss three payments?
Klarna terminates the lease automatically and requires the full balance immediately. Returning the device reduces the amount owed by its current value. Non-payment or failure to return the device leads to collections.
Can I use any credit card for payments?
No. Klarna does not accept American Express, Chase, or Capital One credit cards for Apple Upgrade payments. The Apple Card is accepted.