Apple's iPhone leasing program: How it works, what to consider

Apple recently launched a new hardware leasing program for iPhones and other devices. This update changes how customers secure products, moving away from the previous installment model. Under this agreement, consumers sign a 12 or 24-month lease. Payments are lower than traditional financing, but the trade-off is that you do not own the device at the end of the term. Klarna handles the credit application process, which uses a soft credit check.

There are clear mechanics to the deal. For example, an iPhone 17 Pro with a $1,099 price tag requires a monthly payment of $31.99 on a 24-month term. Once the lease concludes, you must make a final lump-sum payment to own the phone or return the hardware. Terminating the lease early can result in substantial fees. While some carriers also offer similar programs, this is a distinct offering from Apple that requires a carrier plan at signup.

Financial experts suggest caution before entering these agreements. While the low monthly costs appear attractive, they often mask the long-term expense. Financial planners warn that small monthly fees add up quickly when combined with other recurring charges like car loans or streaming subscriptions. Buying a device outright remains the recommended path if your budget permits.

For those seeking alternatives, the Apple Card still provides 0% financing options and cash-back benefits. If you choose to use the leasing program, ensure you account for the residual payment required for ownership. Compare these terms against carrier-specific plans to find the best value for your situation.