When the iPhone made its original debut in 2007, it’s starting price was $499. With top of the line iPhone Pros now starting at $999, that seems like a bargain. Even the “budget-friendly” phones like the iPhone 11 and iPhone XR had original prices of $699 and $749, respectively.
Of course, iPhones can do a whole lot more than they used to, but with high starting costs, they can be a little out of reach for many budget-conscious consumers. Fortunately, there are now more iPhone financing options from ever. Apple, major carriers like AT&T and T-Mobile, and other vendors have leasing options with no or low-interest.
Read on to learn everything you need to know about iPhone financing to get the latest Apple flagship in your pocket at minimal cost to you.
iPhone financing refers to a variety of programs that let you split the cost of your iPhone over a number of months. Most plans are for 24-months, but you can find shorter options as well as upgrade programs that build-in the cost of upgrading after 12-months.
Be sure to look at the terms of each of these options carefully. For example, you can finance your phone through Apple for 0% interest. But other installment plans, especially ones through cellular carriers, may also require you to have a minimum tier monthly phone service with them.
There are also many more options than you might realize out there. You can lease your phone from Apple or a major telecom carrier, but retailers like Best Buy and Amazon have financing programs too.
Financing eligibility varies by provider. Most require a credit score of 680+ though it’s not unheard of for people with lower scores to get approved. You can also lease your phone through your carrier if you have a reliable account history with them.
Finally, there are options even for people with low or no credit scores, but you’ll likely have a relatively high-interest rate of around 10%.
Top iPhone Financing Options
Here are some of your top choices for iPhone financing. Note, this list isn’t exhaustive. Remember, an iPhone is just like anything else you buy, so you can look into loans, splitting payments over your credit cards, and other options.
1) Apple iPhone Payments Plan
The iPhone payments plan is basically a two-year, no-interest loan on a new iPhone done through Apple’s financial partner, Citizens One. It’s not the same as the upgrade plan. The phone isn’t eligible for an upgrade after the year.
You have to pay the full loan over two years though you can pay it early. There is no requirement to purchase AppleCare, but you must also have a service plan with one of the big four carriers.
Who’s this for? Those who don’t need one-year upgrades and are satisfied with their wireless provider. Although most leased phones are unlocked, you’ll still have a two-year commitment to your carrier that must be paid before you can switch.
2) iPhone Upgrade Program
With the Apple iPhone Upgrade Program, you also can lease an iPhone in monthly installments at 0% instead of paying it off upfront. The monthly price varies according to the model and storage size of the iPhone you choose. For example, the 128 GB iPhone 11 was $37.41 per month compared to $31.20 for the Apple iPhone Payments Plan.
This also includes AppleCare, and your phone will be eligible for upgrade after 12 payments. After 24 payments, the phone is yours to keep or sell.
In other ways, it is just like the iPhone Payments Program. The loan still goes through Citizen One, and you will need to pass a credit check.
Who’s this for? Those who want the latest iPhone and don’t mind paying a little more for it.
3) Personal Loans
Personal loans are suitable for any type of financing you need to do (not just for phones). Unlike phone-specific options, you apply for larger amounts between $1,000-50,000, covering other things you might want like accessories.
You can check with your bank or other loan providers. Interest rates can vary from as low as 3% to nearly 40%.
Who’s this for? Those who want to pay $0 and have more flexibility. It can also be an excellent way to build credit provided you pay your monthly charges on time.
4) Finance Through Your Current Carrier
If Apple doesn’t approve you for financing, your current phone carrier may be able to help. AT&T, Sprint, T-Mobile, and Verizon all have 0% interest installment plans you can group into your monthly bill.
However, you may have to pay activation or other one-time charges at checkout, so this is only good if you don’t mind paying a little upfront. You’ll also need to have an account in good standing with the carrier. Be aware; the phone will be locked to only your carrier until you pay off all device charges.
Who’s this for? Those who are satisfied with their current carrier and want to roll monthly payments into their bill.
5) Switching Carriers for Deals
All of the carriers offer deals to incentivize you to switch to them over a competitor. Some of these will not only provide you with a stellar discount on a new phone, but they may pay off the remaining balance if you’re currently leasing a device on installment.
Keep an eye out for what plans qualify. You’ll likely not be able to get any prepaid or a low monthly payment, particularly for Verizon and AT&T, which tend to have the highest monthly rates.
Similar to leasing through your current carrier, the phone will be locked until you pay off the device. You may also need to pass a credit check.
Who’s this for? Those who are ready to switch carriers and looking for a great deal.
6) Straight Talk, TracFone, and Budget Carriers
In the old days, you had to opt for a nationwide carrier if you wanted iPhone financing. Now budget options like Straight Talk are getting into the mix. The benefit here is they offer lower monthly prices compared to the big four while still using their networks.
The downside is that depending on the carrier you choose; you might have some serious interest of 10% APR or more. You’ll also be locked to whatever carrier you picked until the device is paid off.
Who’s this for? Either those with excellent credit who don’t get high-interest rates or those who have no credit and don’t mind the extra interest charges. Either way, you should try to pay off your phone as soon as possible if you choose this option.
Is There Anything Else I Should Consider?
No matter who you choose, getting an iPhone via financing does have its drawbacks. Although you don’t have to pay the full cost upfront, your phone will likely be locked to one carrier, and you don’t have much flexibility what you can do with it.
Likewise, many of the options are only for people with pretty high credit scores who may not even need these services anyway.
Regardless of which option you choose, you can also offset the cost of a new iPhone, but selling your old device. Click here to see how much your phone is worth.
If you don’t need the latest iPhone, there are plenty of retailers, including Swappa, Amazon, and Gazelle, where you can purchase older models for a fraction of their original price. Even Apple has gotten in on this by keeping the iPhone 8 and iPhone XR around in their stores. Many of these phones are also eligible for monthly financing at a lower cost too, depending on the retailer.
But, if you must have the newest iPhone, then just make sure you don’t saddle yourself with any payments you can’t handle. You should still factor your monthly phone bill into your budget as well. This is the best way to take advantage of iPhone financing, building your credit, and always have the phone you want in your pocket.
Instead of the hassle of monthly financing, you can learn about how to find the best iPhone deals here. You can also explore alternative ways of buying a new iPhone in this guide. For everything else you want to know about iPhones and more, head on over to the Buyback Boss Blog now.