Thankfully, the days of cell phone plan contracts are effectively over, but phone financing imposes a similar restriction. Carriers often entice you with a free-upfront or low-cost mobile device that you pay off in monthly installments with your bill for up to 36 months. So while you can technically switch to another carrier, you need to pay off your phone first.
Luckily, you can change carriers even if you still owe money—but you need to settle your phone bill. Learn if you can pay your financed phone off early and what that means.
Should I pay off my phone early?
Almost all cell phone carriers let you pay off a device before your installment agreement finishes with no early termination fees. But to paraphrase Jurassic Park, don't just think about whether you can; stop to think if you should.
Paying off your phone early with your current carrier means you can get your device unlocked, switch phone companies, and lower your monthly payments. Some cell phone companies even let you keep your monthly device bill credits. Most third-party cell phone financing services allow early payments without fees or penalties while saving you on future interest.
However, you lose your promotional credits with some carriers, so there's only motivation to pay early if you need to switch. Thankfully, some phone companies pay you to switch, which covers all or part of a financed phone cost. Here's a breakdown of the benefits and drawbacks of paying off your current phone early.
Pros:
- Get your phone unlocked
- Switch carriers
- Save on future interest
Cons:
- May lose device credits
Can I pay my financed phone off early?
With all of the major carriers—AT&T, Verizon, and T-Mobile—you can pay off your financed phone early. Likewise, most MVNOs (mobile virtual network operators, or smaller carriers) let you settle your bill for a financed handset prematurely. Let's look at each carrier to see what that entails.
AT&T
AT&T's terms and conditions allow you to pay off your phone early at any time. With AT&T, paying off a phone before the end of your installment plan requires paying the remaining balance for your mobile device. If you've purchased your device at a discount via a phone deal, you lose any remaining credits and can't apply them towards discounting your phone payment. Because you miss out on bill credits, we recommend that AT&T customers pay off their phone early only to switch carriers; otherwise, it's more cost-effective to keep the phone on your current payment plan.
Note that you also have an early upgrade option through AT&T's Next Up program if you prefer to have a newer phone more frequently.
T-Mobile
T-Mobile lets you pay off phones early. Its Equipment Installment Plan (EIP) program allows customers to purchase a device and break the cost up into monthly payments over two years. Luckily, the Un-carrier lets you keep your EIP cell phone bill credits at the account level.
For instance, with T-Mobile, if you pay off a phone and have $800 left in bill credits, those credits are applied monthly until the EIP term expires. You only lose your credits if you cancel your cell phone plan with T-Mobile. Because you get to keep your discounts, paying off your phone early with T-Mobile makes sense, even if you don't plan on hopping over to a T-Mobile MVNO.
Verizon
Verizon customers can pay off financed phones early without a penalty. However, you lose any remaining device credits. Thus, if you plan to stay with Big Red, avoid paying off your phone early. But if you want to switch to a rival carrier (or even a Verizon MVNO), settling your phone credits before your installment plan is completed is a great choice. Otherwise, we recommend riding it out.
MVNOs
Many mobile virtual network operators provide cell phone financing options. Some smaller carriers offer direct phone credits, while others, like Visible, partner with third-party services like Affirm. Therefore, what happens when you finance a cell phone from an MVNO and pay it off early varies. For example, settling before your agreement ends with Affirm makes sense because early payments don't incur penalties, and it saves you the future interest. However, this varies a lot by carrier.
Top carriers to switch to
If you're considering paying off your phone early, chances are it's because you want to change carriers. Our favorite big carrier cell phone plans are T-Mobile's Experience More, Verizon's Unlimited Plus, and AT&T's Unlimited Premium.
We also recommend Visible's Visible+, Mint Mobile's Unlimited tier, and US Mobile's Unlimited Premium for smaller carriers. Check out the best cell phone plans on the market below:
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#1
|
Visible
$25 Visible Plan
$25.00/mo
Taxes & Fees included
|
|
#2
|
Mint Mobile
Unlimited Data Plan
$25.00/mo
$75.00 upfront payment for 3 months (equals to $25.00/month). Intro pricing for new customers only.
|
|
#3
|
XFINITY Mobile
Mobile Select Plan
$0.00/mo
(for the first year of service) <br>Regular rate of $30/mo. thereafter
|
|
#4
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T-Mobile
Essentials Saver
$50.00/mo
with Auto-Pay - Taxes & Fees NOT included
|
|
#5
|
US Mobile
Unlimited Starter Plan
$25.00/mo
$20/mo. for 6 months; $25/mo. thereafter
|
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#6
|
Verizon
Unlimited Plus
$70.00/mo
+ Taxes & Fees. Price includes AutoPay & Paperless discount.
+ $40 Upfront
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#7
|
Twigby Mobile
Unlimited Talk, Text and 2GB Data
$5.00/mo
for the first 3 months then $15.00/month
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#8
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Cricket
Supreme Unlimited Plan
$55.00/mo
with AutoPay; $60 for the first month.
+ $9.99 Upfront
|
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#9
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AT&T
Value 2.0℠
$50.00/mo
+ $35 Upfront
|
|
#10
|
Spectrum Mobile
Unlimited Data
$30.00/mo
+ $20 Upfront
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FAQs
Can I pay my phone off early?
Yes, almost all carriers let you pay your phone off early.
What happens if I pay off my phone early?
When you pay off your phone early, you're free to switch carriers and get your phone unlocked. Some carriers let you keep your bill credits and even let you save on future interest, while others cancel your credits. You don't suffer any early termination fees, however.
Should I pay my phone off early?
You should pay off your phone early if you have the money, need your phone unlocked, want to switch carriers, or can save on interest—then you should pay your phone off early. But you shouldn't pay early if it costs your remaining bill credits from an installment agreement. If you absolutely need to change cell phone companies, shop around for a carrier that will pay you to switch.
Is it better to pay for a phone in full or use cell phone financing?
Whether it's better to pay for a phone upfront or finance depends on your needs and budget. Buying a phone outright allows you to switch carriers at any time and lowers your monthly bills. But it's a big upfront expense.
On the other hand, financing cell phones lets you get a great mobile device immediately with little out-of-pocket expense, but you pay more each month on your phone bill in device installments. Overall, we recommend paying upfront if you can afford it and plan to keep your handset for a few years. Otherwise, financing is a good alternative if you can't shell out for the device you want and take advantage of trade-in deals.
Moe Long
Senior Writer
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