Mobile Phones and Finance

Whether you’re looking for a low-cost device or a high-end smartphone, the following article will be especially useful if you want to acquire a phone without spending much money in the short term!

What Is the Financial Impact of Mobile Phones?

Let’s establish this payment mechanism first before we get into how it works. Financing for mobile phones refers to gadgets that can be purchased on credit. Contract phones and pay monthly phones are other names for them.

With a credit account, you can defer payments for your new purchase until a later date. In most cases, you’ll be required to repay the device’s purchase price plus interest on a monthly basis. Often, there will be some form of upfront cost as well.

Mobile phone financing has gained in popularity in recent years. In most cases, obtaining a mobile phone on finance will demand a strong credit history. Many sellers now provide this option.

How Do Finance Mobile Phones Function?

There are a number of details to consider, as with any purchase now, pay later agreement. Let’s look at how financial mobiles work in more detail. Before you can buy a phone on credit, you’ll need to fill out an application and wait for approval.

A credit check is nearly always required. In most situations, you’ll also be required to complete an online form with information such as your name, address, and phone number.

Payments are often divided into a set number of monthly instalments. These payments will consist of a fraction of the device’s total outstanding cost plus interest.

Is it possible to buy a phone on credit if I have bad credit?

If you wish to make new credit purchases, having a bad credit history can be a hindrance. It will be more difficult to purchase a mobile phone on credit if you have a low credit history. It will, however, depend on the firm and how terrible your credit is.

When applying for a mobile phone on finance, your credit score is an important factor to consider. While it is not impossible, if you have bad credit, your application will be unlikely to be granted. Having said that, there are a number of mobile phone finance bad credit packages on the market that are worth looking into.

The Financial Benefits of Cell Phones

There are benefits and drawbacks to purchasing a mobile phone on credit. It would be advantageous if you considered these facts before deciding whether this payment option is suitable for you. Let’s start with some of the advantages.

Lower Prices on the Most Recent Cell Phones

New phones, such as the iPhone 12 and the One Plus 8 Pro, are high-quality, top-of-the-line devices with a variety of cutting-edge capabilities. They are, however, expensive, ranging from £500 to £1000. For the vast majority of people, this is a big investment.

However, it is possible to buy brand new gadgets on credit, allowing almost everyone to purchase brand new, high-quality equipment. You may spend as low as £15 to £30 per month for one of these gadgets, depending on the length of the payback period and the interest rate.

Payment Options That Are Modular

Many businesses provide a range of payment options. In some cases, you may be able to prolong the time it takes to pay off your debt. These options are often 12 or 24 months in length, though in other cases, you may be given the option of repaying over six or 18 months, among other options.

When it comes to how often you’ll have to pay, it’s usually once a month, although it may be weekly. If you can pay off your debt in a fair amount of time, several organisations will provide zero-interest solutions.

Alternatively, you may be able to avoid paying anything for the first few months in some cases, however this will almost always include paying interest.

However, as you can see, there are a plethora of options to choose from, with one potentially ideal for every consumer.

Take advantage of additional bonuses and gifts

In some cases, you may be eligible to extras and additional gifts as part of a pay monthly offer. This will not be available from every company that offers a buy now, pay later option, and the nature of these bonuses and extras will also vary widely.

Mobile Phones’ Financial Disadvantages

Of course, there are certain drawbacks to mobile phone financing programmes. In the sections that follow, we’ll go over some of the most common downsides.

There is the possibility of accruing large debt

If you use your credit card too frequently, you will quickly accumulate a considerable amount of debt. Of course, if you receive any amount of credit, you will be in debt, but there is a risk that you may accumulate too much debt. Credit isn’t a big deal if you keep it to a minimum, handle it properly, and know you’ll be able to make your payments on time.

Failure to make a timely payment, on the other hand, may result in additional interest on top of the interest you’re already required to pay under the initial agreement.

Credit score

Missing a payment may not only cost you money, but it may also have a negative impact on your credit score. This, in turn, will make obtaining credit more difficult in the future.

While some buy now, pay later services do not verify applicants’ credit scores, a credit check is usually undertaken. Only agree to a credit-based arrangement if you are confident in your ability to make timely payments.

Who Offers Mobile Financing?

There are various companies that sell mobile phones as part of buy now, pay later contracts. These are often offered on a monthly basis. Phones on finance are available from firms like Affordable Mobile Phones and Carphone Warehouse, as well as direct carriers like Virgin Media and Three.

By Googling ‘Pay monthly mobile phone near me,’ you can find dozens of instances around you. Many businesses, including most mobile phone companies, accept this payment method. It’s a popular payment option that has grown in popularity in recent years.

Considerations to Make Before Buying a Financed Mobile Phone

Even after examining the advantages and disadvantages of getting a mobile phone on credit, there are a few additional aspects to consider before committing to a new phone on credit. Let’s take a closer look at a few of these points.


It is vital that you are confident in your ability to make your weekly or monthly payments. The buy now, pay later payment options have a certain allure.

It’s also critical to understand if you’ll be able to make future payments on time, which will almost probably include interest. Job stability and savings are perhaps the two most critical factors in deciding how confident you are in your ability to make payments on schedule.

Short-term vs. Long-term Saving

There is little doubt that acquiring a mobile phone on finance will cost you money in the long run, unless you get a zero-interest arrangement.

However, this is just a disadvantage if you believe it outweighs the advantages of short-term savings. Furthermore, buying on credit allows you to get a new phone right away rather than later.

Buying a phone on credit may also be beneficial if you’re looking for the perfect gift, whether for Christmas or a friend’s or family member’s upcoming birthday. So, before you buy a phone, weigh the short-term benefits of financing it against the long-term financial loss.

Is it better to simply wait for the device’s price to drop, or to look for it second-hand at a lower price? These are the kinds of questions you should ask yourself before deciding whether or not to use this payment option.

Interest Rates

Every contract phone agreement with an interest rate will have its own variable or fixed representative APR. This is normally between 10% and 25%, while some companies provide lower or higher rates than those in this range.
Before making a purchase, confirm what interest rate is available with any particular contract, as you may find that you can acquire the gadget you’re looking for with a lower interest rate from a different company than the one you’re originally considering.


Contract phones are not for everyone, but if you believe it is a viable alternative for you, do your research and choose a supplier that offers a fair and affordable value.

As previously established, loan rates can vary greatly, and it is worthwhile to examine interest rates from numerous businesses for any given item before making a purchase. This article has described what mobile phones on finance are, how they function, and the advantages and disadvantages of using them.

We’ve also discussed other topics, such as which firms finance mobile phones. You are now well-equipped to reach an informed and sound conclusion. Best luck, and don’t forget to research the many brands and companies that provide phones on credit before making a decision!


Is good credit required to secure a mobile phone contract?

In most cases, yes, a good credit score is essential, though there are a few exceptions.

Can you cancel a mobile phone contract?

No, unless you choose to return the gadget. If you purchase a device on credit and do not return it, the debt is not discharged. Flexibility, on the other hand, is frequently discussed. In many cases, if you’re truly struggling, companies will agree to allow you postpone your payments for a limited length of time, but it all depends on the company and your condition.

When will I be able to repay my debts?

The timeline defined by or agreed upon with the company will determine it. For example, it may be a 12- or 24-month repayment period, but it could also be six, 18 months, or even an entirely other time period in some cases.

Is it possible to purchase an iPhone 12 on credit?

Yes, various companies provide the option to purchase the iPhone 12 on credit with monthly payments of around £30. Carphone Warehouse is one such example.

What is the interest rate on a mobile phone loan in the UK?

If you wish to buy a phone on credit, the interest rate is normally between 10% and 25%. As you can see, the interest rate fluctuates significantly, and it is typically a variable rate rather than a fixed rate.