Getting a Phone Contract vs. Mobile Phone Financing

If you’re thinking of getting a new phone but you don’t have the cash to pay for it upfront, there are two options you can consider. Either you apply for a phone contract or buy a phone on finance. In any case, you’ll only need a small amount for the upfront fee or no cash at all. But which option is better? To know which option is best for you, here’s a quick overview to better understand how phone contracts and financing work:

Applying for a phone contract

When you apply for a phone contract, you get to choose a handset plus a phone bundle on your call, text and data services. Provided that you have good credit, you’ll be able to choose any handset including the latest releases from your favorite brands. Depending on your handset choice, you may be required to pay an upfront free and a fixed monthly fee that covers the cost of your handset choice and phone bundle. Typical phone contracts in the UK lasts for 24 months.

Buying a mobile phone on finance

Other than applying for a phone contract, you can also opt to buy a mobile phone on finance. Instead of hooking yourself to a particular carrier, mobile phones on finances typically allow you to use your own Sim card and choose your own network provider. What financing does instead is let you buy the phone now and pay it later through installments over a period of 12, 18 months or longer.

Which is a better option?

Both options have their set of advantages and disadvantages. There is no one best option for every one. Whether you opt for a phone contract or choose mobile phone on finance, the key is to make sure that you can afford the fixed monthly payments. As long as you know you can afford the monthly payments, you’re on the right track.

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Do you really need the latest high-end handset?

With new handsets released year after year, keeping your phone up to date to what’s hot and new can be difficult not to mention costly. Before you buy a new phone, it’s important to know whether you really need the latest handset or not. To help you decide, answer the following questions:

How much can you afford?

Like with any other major purchases, one of the key considerations is the budget. The first thing to ask yourself if you want to know if you need the latest handset or not is your budget. If you cannot afford the latest handset and you have bad credit, you might want to stick with cheaper handsets for now. This is especially true if you are planning to apply for a phone contract or mobile phone financing with bad credit.

How do you intend to use your phone?

It would also help if you assess how you intend to use the phone before buying. The latest handsets are attractive for their improvements, enhancements and new radical features. But the question is, do you really need them? Considering the costs of new phone releases, you may be better off waiting until the price drops.

Will you use your phone for other functions other than calling and texting?

If you intend to use your phone other than calling and texting, however, then it is worth considering the latest handset. If you plan to check your emails, browse online, play games and conduct video calling on your handset then the latest handset may be a worthy investment.

The Bottom Line

Whether you buy the latest handset or not, remember that the bottom line is all about meeting your needs and budget. If you think that the latest handset is what will meet your needs then go for it by all means. You’ll be using the phone everyday anyway so the investment should be worth it.

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How to Find the Best Handset for Your Needs

In today’s digital world, mobile phones are no longer luxuries but necessities. Buying one should be thought out carefully especially because handsets can cost a fortune. If you’re in the process of buying a new handset and you’re having a hard time picking a model, here’s a quick guide that may help.

When buying a new smartphone, whether with cash or on financing, there are key considerations to keep in mind. Here are some of these key factors to help you choose your handset right:

Set your budget

One of the first things you need to do is obviously set your budget. When doing so, it’s important not to be a cheapskate. With phones now a necessity, you’ll probably use yours daily, which means you need a phone that can handle day-to-day use. In most cases, this means you’ll need to invest in a quality phone and these types of phones may cost you.

Choose your cellphone type

You should also know that there are different types of cellphones. There are the basic phones for basic functions and then there are the smartphones with all the bells and whistles. Obviously, smartphones are more expensive. If you’re going to use your phone for basic functions and other advanced features like browsing online, playing games and more on your mobile then it makes sense to invest in a quality smartphone.

Choose your phone features

If you’re leaning on buying a smartphone, one way to whittle your choices to the best models for your needs is to choose the phone features that you want. From screen size to operating system, processor, camera, battery and other specs, these are things you need to look at more closely. If you want a smoother and faster performance then you’d want a phone with a powerful processor.

Check out financing options

Once you have the best cellphones to meet your needs in mind, the next step is to choose a financing option. If you’re not planning to buy the phone with cash upfront, financing is one way to do it. With financing, you can buy the phone and pay it later. Instead of paying the phone in full, you get to distribute the cost over a period of time. Financing options, in general, may last for 12 or 18 months.

Check out phone contract deals

Another way to own the latest handset is to apply for a phone contact deal. As long as you have good credit, getting approved for a phone contract should be easy. With a phone contract, you get to choose a handset along with your phone bundle. Typical phone contracts in the UK lasts for 18 or 24 months. You’ll be paying a fixed monthly fee that covers the cost of the phone as well as your phone services.

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Should You Finance Your Mobile Phone?

Did you know that you could buy your handset now and pay later? If you want to own the latest handset but has no cash to pay for it upfront, there are now financing options you can apply for. With handsets becoming more and more advanced and expensive by the day, these options are also becoming more popular among subscribers across UK.

But should you take one? Like any other types of financing, buying your mobile phone on finance has potential financial consequences if not taken responsibly. If you’re planning to finance your next handset purchase, it’s best to know the pros and cons of this financial move.

What are the advantages?

Financing mobile phones has been a popular option for many consumers in the UK for a number of reasons. Here are some of the advantages you can also enjoy:

Avail the latest handsets

With mobile phone financing, you get to avail the latest handsets even if you don’t have the cash to pay for the phone upfront. As long as you meet the basic requirements, you have the freedom to choose any handset you want. With financing, you get to spread over the phone’s cost over a 12-month period or longer. Most financing options also don’t require any upfront payment so it’s really one of the easiest ways to own the latest handset.

Minimum requirements

Unlike other major types of financing like a house or car, mobile phone financing only has minimal requirements. In most cases, you’ll just need to be of legal age, a UK resident and must provide proof of steady income. If you have good credit, approval is super quick but if even if you have a less than stellar credit rating you are still welcome to apply.

Fast approval

Approval with this type of financing is also very fast. As long as you meet the requirements and provide the necessary documents, you can expect to get approved in as fast as within 24 hours.

What are the disadvantages?

While advantages in some ways, financing your mobile phone also has its set of disadvantages. Below are two of its major disadvantages:

Handsets depreciate quickly

If you opt for mobile phone financing, one of the biggest disadvantages is the fact that mobile phones depreciate quickly. If you buy the latest iPhone today, the price drops quickly in just a few months. If you’re financing, for example, is over an 18-month period, you’ll still be paying for the original price but at present, the price has already dropped significantly. There’s also the fact that major manufacturers release new phones yearly. You’d already want the new release but you’re still paying for your mobile phone on finance.

Nonpayment may hurt your credit score

Another major disadvantage is the potential damage it can cause your credit score. Because financing can be lengthy, the possibility of delayed or missed payments is always there. If this happens, you may end up with poor credit rating as a result.

Should you finance your phone?

Considering the pros and cons, should you finance your phone? As long as you’re sure that you can handle the monthly repayments, you should go ahead and finance your phone. Just keep in mind that one delayed or missed payment may lead to extra charges and fees. Opting for short term financing is also more recommended as interest rates is lower this way. While you’re at it, follow the simple rule to finance only what you need and what you can afford.

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Guide to Buying a Mobile Phone on Finance

Mobile phones can be expensive. If you’re especially eyeing to own the latest handsets available in the market today, you need to be ready to spend money. Just take for example iPhone 6 and iPhone 6 Plus. At the moment, both phones are priced at £539 and £619 in the UK respectively. With the iPhone 6S expected to launch a few weeks from now, the phone is rumored to have an ever higher price tag.

But just because you don’t have the cash to pay for the phone upfront doesn’t mean you can’t one the latest iPhone, Samsung Galaxy or any other offer from the leading brands. With mobile phone finance deals, you can avail the latest handset by paying for the cost in installment basis. If you’re interested about this arrangement, here’s a quick guide to better understand how it works:

What are mobile phone finance deals?

As the name suggests, these deals exist to allow consumers to pay for high-end handsets in installment basis. It’s just like you’re financing a car or a house. Only this time, the financing is small and payable in a shorter period of time. If you can’t afford to pay for a handset upfront, financing is one option you can consider. There are providers online who specialize in this type of financing. Some carriers or providers may also offer such types of financing.

Who can apply?

Anyone who is of legal age, a UK resident and can provide proof of steady income can apply for mobile phone financing. Some providers may require you to have good credit to be eligible. But even if you have bad credit, you can still try to apply provided that your income meets the minimum requirement. Most providers are flexible with terms as long as you can prove that you can afford the monthly installment.

What are the requirements?

As mentioned, the requirements are pretty basic. You just need to be of legal age and a UK resident. In addition, you’ll need to provide supporting documents including proof of identification, billing address, proof of income and bank details for the automatic repayment arrangement. Some providers may accept credit cards as payment method.

What types of phones can be financed?

Most providers offer financing for all types of phones. That includes the latest handset offerings from popular manufacturers including Apple, Samsung, Lenovo, HTC, LG, Nokia and more. Approval for your handset choice, however, is dependent on a number of factors. One of which is your income. Another is your credit history. Lower income consumers with bad credit are recommended to stick with cheaper handsets.

Should you take one?

Financing your mobile phone purchase like other types of financing is a major financial move. It comes with consequences if left unpaid. If you’re planning to go this route, just make sure you know and understand what you’re getting into. It’s a type of debt that can bleed you out with hidden fees and charges especially if you miss or delay with your monthly payments.

Before you go ahead and finance your mobile phone, make sure you assess your needs and budget thoroughly. While you’re at it, you’d also want to research the different types of financing available for your personal circumstance. Again, remember to follow the simple rule to only opt for financing if you can afford it. Otherwise, you may be putting your credit score at risk. In the event of nonpayment, you’ll incur skyrocketing interests and fees that may get out of hand.

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