When deciding to purchase a smartphone, it is vital to remember that you get the relevant option that you can afford. Still, due to numerous advanced features and other factors, most smartphones nowadays are highly expensive. For instance, they can help you in both professional and academic pursuits.
The latest options you can find can offer you a chance to edit images, and videos, enjoy high-resolution video games, and audio recording. Therefore, you can understand that these features come with advanced models that require a small fortune to get them.
Remember that the latest mobile devices feature processor, memory, and RAM as computers, meaning you have a small device in your pocket. However, buying a new one is an expense that will affect your savings and reduce your chances of getting the high-end option. For instance, you can choose financing options that will provide you peace of mind.
Apart from getting a contract from a provider, which will bring you a chance to reduce the interest rates, you can choose personal loans that feature flexibility, lower interest than credit cards, and a chance to pre-pay them in case you can afford to do it. Personal loans are the most common and popular options you can find, which is vital to remember
Should You Get a Personal Loan for Buying a Smartphone?
You should remember that personal loans are perfect for financing, which will help you purchase anything you prefer. Generally, they do not come with specific obligations on what you can buy with them, meaning you can finance laptops, gadgets, phones, TVs, and other things you need.
At the same time, you will get a smaller amount compared with other options, meaning you can repay in the next few years. Still, you must ensure to create a repayment strategy beforehand, which will prevent potential issues from happening. The most common benefits of choosing a personal loan to get a mobile device are:
- Unsecured Characteristics
You should know that you can get a loan without using collateral in the form of an asset, savings account, or retirement fund. Instead, you will need a good credit rating and score, which will allow a lender to consider you less risky than people with low scores. Of course, unsecured loans require higher scores for you to be eligible to get them.
For instance, you can find a co-signer if you lack a credit history. It means one of your parents can guarantee that you get a loan for a mobile device, which is perfect for students who do not have credit histories. This financing tool is a much better solution than pledging valuables as collaterals.
- Flexibility
You should remember that getting a longer-term loan means you will pay more interest throughout your life. However, when choosing a shorter repayment period, monthly installments will increase, while you will spend less than long-term options. Still, high monthly expenses can affect your finances.
Compared with secured loans that feature specific requirements for getting them, which means you must buy a specific thing, personal loans are flexible. It means you can purchase whatever you want while getting flexible repayment terms. Therefore, you will have the freedom to choose a tenure without restrictions.
The main idea is to determine the repayment terms that function best for your monthly income. Avoid spending too much of your monthly gross income on a personal loan, meaning you should go for long-term options unless you have enough to afford high monthly expenses.
- Avoid Paperwork
You should know that traditional lending institutions will require you to show personal documents, pay stubs, IDs, and other paperwork to ensure you get the loan you wanted in the first place. Besides, you must fill wide array of application forms which can make the entire process tedious and lengthy.
Besides, after applying, they may reject you due to lack of creditworthiness or other factors that may affect the overall situation. However, when you choose an online lender, the process is seamless, because you should submit employment proof, pay stubs, and a few documents, and they will approve you in a matter of hours.
- Fast Approval
As mentioned above, getting a personal loan with a specific online lender will offer you a chance to get a loan the next day, and in some situations, the same day you apply. Most lenders use artificial intelligence and machine learning technologies to assess the credit score and risks associated with your relevant information.
That way, they will allow you to receive instant approval in a matter of minutes after applying.
- Prepayment
You should know that the longer your term is, the more interest you will pay throughout the loan’s life. Therefore, if you get a chance to repay the entire amount of your loan faster than previously agreed, you should go for it. Of course, we recommend you check out with a lender to see whether you will get prepayment penalties or not.
- Boost Credit Score
If you have never borrowed money before, you do not have a credit history, which makes you unable to get a specific loan. In this situation, choosing a mobile loan with a co-signer will help you get on track and ensure you obtain a relevant perspective.
You will need minimal documentation, while you can apply and get a decent credit score depending on external factors. You should know that the amount you will get is small, meaning you can handle the repayment with ease.
As soon as you get the funds, the clock will start ticking. Therefore, you should handle the next payment per agreement. Make sure to handle monthly installments on time to prevent potential issues from happening. Closing a loan without missing payments will boost your credit score, meaning you can get a better loan in the future.
Other Mobile Financing Options You Can Choose
A personal loan is just one way of getting a smartphone for your specific needs. We can differentiate other options too, while they come with higher interest rates and the ability to get into severe debt afterward.
- Credit Card
You should remember that credit cards do not charge interest if you repay everything before the billing date. At the same time, the issuer will provide you with a limit you should avoid reaching, although it depends on your credit score and monthly income. Remember that the downside of a credit card is the credit utilization ratio, which should not go over thirty percent.
It means you should avoid spending more than seventy percent of the limit because that will immediately cause your score to plummet. Apart from that, the interest rates are two times higher when getting money from credit cards, meaning you will end up with a significant amount you must return.
- Financing Through Current Provider
If you have a long-lasting relationship with a particular provider, but your goal is to upgrade a phone, you will get different financing options, including:
- Interest-Free Installment – Generally, providers will offer you an interest-free installment loan that will feature a two-year contract. Some of them require an initial amount in the form of a down payment, while you can cover that by offering an old device instead.
- Trade-Ins – Trading an old device will help you reduce the expenses of a new phone you wish to purchase. It means you may not need financing at all, because you will reduce the expenses significantly, which will allow you to pay upfront in cash.
- Leasing – The third option is less common but available among specific providers. It means you can lease a smartphone for the next two years. Although it functions the same way as buying a phone, you will pay installments, but you will now own it. Instead, you must return it after the contract ends, which will allow you to upgrade it to the new one instead
The main disadvantage of choosing carrier-based financing or hvor er min telefon is the term in which you must sign a two-year contract in most cases It means you cannot change your phone until the end of the plan, which will limit your chances of upgrading it faster.
- Getting a New Provider
Suppose your current plan is over. In that case, you can change service providers. The main idea is to qualify for a deal that will offer you a chance to switch providers throughout the process.
Everything depends on the current carrier you have because some will directly cover the phone expenses, while others will provide you with lower monthly expenses and installments. You can also qualify for a signup deal, especially when adding a new option that will provide you peace of mind.
- Manufacturer Financing
If you wish to get a smartphone directly from a manufacturer, you can choose various options depending on your preferences. Generally, the most popular options are Samsung and Apple which offer different options that you can choose to get financing.
For instance, you can either get a specific credit card, which will offer you interest-free financing, or monthly installment plans without interest. Everything depends on your needs and preferences.