Doordash customers can now earn a loan with a $40 burritos or a $50 pizza delivery.
Financial Tech Company’s Klarna and delivery company Doordash said they partnered to offer a “buy now, pay later” loan option for orders.
According to Klarna, the arrangement announced Thursday allows customers to postpone the costs of placing them online or through the app, or through the app at a later date.
Chuck Bell, director of Advocacy Programs at Consumer Reports, said that “buy now, pay later” loans are easy to manage for many. He advised that they should selectively use these loans, and that customers should recognize when payments will be due and have the money to pay back the loan.
“If you don’t pay your bills on time and start earning multiple deferred fees, it can become a very expensive Chili Lereno or Pad Thai,” Bell said.
Research shows that “buy now, pay later” loans are used more frequently by people who are already in debt.
Bell said these loans could cause problems for people with many loans and use them to fund recurring expenses such as food.
“You know you’ll have to buy food next month and are pushing some of that cost away into the future months?” he said.
Doordash is best known for offering food delivery from restaurants, but retail items such as electronics, makeup and medication are also available.
In a statement, Anand Subbarayan, head of Money Products at Doordash, said flexible payment options are “essential” to the company’s customers as they expand the types of products they offer.
After the announcement, concerns spread online to use payment deferrals for $10 or $20 food delivery purchases.
In response, Klarna said in a blog post that the option to pay in four installments is only available for purchases over $35. The company also said it would be better to pay $200 for interest-free installment groceries rather than paying with a credit card.
“Because of our lack of interest, our business model relies on customers to pay off on time, unlike credit cards,” says Klarna. “So we will perform a thorough eligibility check before we approve a purchase and restrict the use of our services if a customer misses payment, as credit card companies benefit from rotating out of payment delays.”
Stockholm-based Klarna is preparing for her first public offer. They’ve already worked with other food delivery companies, such as Instacart and Uber Eats.
“Buy now, pay later” loans offered by companies like Klarna, PayPal and Affirm are under scrutiny as they are becoming more popular.
In 2022, 21.2% of consumers funded at least one purchase with these loans, according to a January 2025 report by the Consumer Financial Protection Agency. This is up from 17.6% in 2021.
Compared to people in the same age and credit score category who did not use these loans, people with “buy now, pay later” loans are more likely to have higher balances of other types of debt, such as personal loans, student loans and credit card liabilities, the report says.
Approximately 20% of 2022 “buy now, pay later” borrowers were classified as heavy users and received at least one loan per month, the report said. According to the report, approximately 63% of borrowers had multiple concurrent loans at some point in the year.
The CFPB, a watchdog targeting the Trump administration’s shutdown, has been scrutinizing these types of loans.
Last year, the bureau ruled that lenders must provide similar protection to credit cards provided.
According to a January bureau report, people defaulted on “buy now, pay later” loans at a lower fee than credit card payments.
Between 2019 and 2022, borrowers defaulted on 2% of these loans and defaulted on 10% of credit cards held over the same period.
