Is Third-Party Financing for Cellphones Worth It?

Happy young woman on her new phone
Dean Drobot /

One of the best ways to save on a new cellphone is to take advantage of the deals offered by major carriers that are tied to monthly payment plans.

These are appealing not only because they save on the bottom line, but also because they spread the large costs of smartphones over several months of much more manageable payments with no interest.

But the big carriers aren’t the only ones that offer cellphone financing. Many MVNOs also have payment plans; however, most of these finance plans are backed by third-party lenders and typically come with interest rates. So, is financing with a third party really worth it?

Pros and cons of financing with a third-party lender

As with any financing, the main draw with financing your phone with a third party is paying for your phone through low monthly payments rather than one huge upfront cost.

It’s no secret that smartphones are very expensive these days, especially if you are looking to get your hands on a high-end iPhone or Samsung Galaxy Note. Other than that, there aren’t really many other pros for financing with an MVNO and their third-party partner.

While there’s really only one pro for this option, there are a handful of cons, and one is pretty big.

Some of these plans offer no-interest financing, but you may need excellent credit to qualify. Otherwise, customers are going to be charged at least some interest.

This, plus the fact that these plans tend to be short, means that the monthly payments can be pretty high.

Financing with Affirm

Affirm is the biggest third-party lender for smartphone loans, partnering with the most MVNOs. You can get approved for financing after a soft credit check.

Affirm offers payment plans of six, 12, 18 or 24 months and charges anywhere from 0% to 30% interest depending on credit.

MVNOs like Mint and Reach Mobile (among several others) partner with Affirm.


The other third-party financing option you’ll find commonly offered with MVNOs is from SmartPay.

Offering lease-to-own plans, SmartPay doesn’t technically charge interest, but it does charge lease factors, which is basically a leasing plan’s equivalent of an interest rate.

These lease-to-own plans might come with manageable monthly payments, but in the long run you typically end up paying much more for your phone than it is actually worth.

Are they worth it?

If you can manage to get a third-party loan for your phone, with no fees and no interest, it could be worth it.

However, these might not be very easy to get.

If you are debating one of these finance options, you really just have assess how much interest you’re willing to pay in order to get that phone you want.

Here are some MVNOs that offer monthly payment plans for the iPhone 12:

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