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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