Can I Sell a Financed Phone? Explained

Selling a financed phone can be a confusing and daunting process for many people. The question of whether it’s okay to sell a phone that is still financed is common. The answer to this question is not a simple yes or no, as it depends on a variety of factors.

It’s important to understand the terms of your financing agreement with your cell phone carrier. Some providers may allow you to sell your financed phone, while others may not. Additionally, if you decide to sell your phone, you’ll have to pay off any remaining balance first. Remember, selling a phone with an unpaid balance can hurt your credit score if you stop making your monthly payments.

What Is a Financed Phone?

A financed phone is a mobile device that is bought through a payment plan or financing agreement. Instead of paying the full price, the buyer agrees to pay for the device in installments over a set period of time.

Reasons to Sell a Financed Phone

There are several reasons why someone might want to sell a financed phone. Here are a few:

  • Upgrade: The buyer may want to upgrade to a newer phone and sell their current financed phone to cover the remaining balance.
  • Financial hardship: The buyer may be experiencing financial difficulties and need to sell their phone to pay off other debts.
  • Change in carrier: The buyer may be switching to a new carrier that does not support their current phone model, so they need to sell it to buy a new one.

It’s important to note that selling a financed phone can be a bit more complicated.

Unsecured Credit and Monthly Payments

Understanding Unsecured Credit

When a person buys a phone on finance, they are taking out an unsecured loan. This means that the loan is not backed by any collateral, such as a house or car. Instead, the lender relies on the borrower’s creditworthiness to determine whether to approve the loan.

Impact of Selling a Financed Phone on Monthly Payments

If a person sells a financed phone before they have paid off the loan, they will still be responsible for making the monthly payments. This is because they are still the owner of the phone until the loan is paid off. If they stop making payments, their credit score will be negatively affected, and they may be subject to collections and legal action.

Working with Your Service Provider on Payment Arrangements

If a person is having trouble making their monthly payments, they should contact their network provider. Many providers offer flexible payment options, such as deferring payments or setting up a payment plan.

It is important to understand the consequences of selling a financed phone and to work with the service provider to make payment arrangements if necessary.

Credit Score Considerations When Selling a Financed Phone

If you are thinking about selling a financed phone, it’s important to remember that it can impact your credit score. While selling a financed phone may seem like a quick and easy way to make some extra cash, it can have short-term and long-term effects on credit scores.

Effects of Selling a Financed Phone on Credit Scores

In the short term, selling a financed phone can have a negative impact on credit scores. If the phone is not paid off before selling, it can result in a missed payment or default. This can have a significant negative impact on credit scores. If you continue to make your monthly payments, there are no negative effects on your credit for selling your financed phone.

It is also important to consider the potential impact of selling a financed phone on credit applications in the future. If a lender sees that an individual stopped making their monthly payments for their phone, it could be seen as a red flag and result in a lower credit score.

When selling a financed phone, it is important to weigh the potential short-term and long-term effects on your credit score. We recommend paying off the phone in full before selling it to avoid any negative impacts on credit scores.

Cell Phones Under Contract

Understanding the Cellphone Contract Terms and Conditions

When purchasing a cellphone under a contract, the buyer agrees to pay a monthly fee for a specific period of time. The contract also includes terms and conditions, which may include penalties for canceling the contract early or failing to make payments on time.

Are There Any Penalties for Cancelling an Unpaid Cell Phone?

If a cell phone is unpaid, the buyer may face penalties for canceling the contract early. These penalties may include paying off the remaining balance of the contract or returning the device to the seller.

Can I Still Sell My Financed Phone if It’s Unpaid?

Generally speaking, it is okay to sell a phone that is unpaid but there are several caveats. Remember selling a financed phone is not against the law. However, you must make sure to continue your payments for your device to prevent it from getting blocked or blacklisted by your carrier. Keep in mind that financed phones are worth significantly less.

What About My Carrier?

  • T-mobile: Yes, you can sell your T-mobile phone that is not paid off or financed. But, if you fail to make your monthly payments, T-mobile may block your device.
  • Verizon: If you owe money on your Verizon phone you can still sell it if you choose to. It’s important to continue making your monthly payments to prevent the phone from getting blacklisted.
  • AT&T: As with the other carriers, you can also sell your AT&T device that is not paid off. You must continue making your monthly payments or pay off your device in full.

Can I Pawn a Phone that isn’t Paid Off?

As mentioned before, you can sell your financed phone (due to the line of unsecured credit that is extended to you) this includes pawning your phone. The device is yours to pawn. Again you must continue making your monthly payments or pay off the device in full.

Can I Sell a Phone that is Financed and BAD ESN?

Sometimes people stop their payments after selling their phone which as a result can cause the phone to have a bad ESN or IMEI. ESN stands for Electronic Serial Number and IMEI stands for International Mobile Equipment Identity. Each cell phone has these unique identification numbers that carriers and service providers have access to. Carriers can blacklist devices for non-payment, insurance fraud, and phones that are lost/stolen.

If you sell a phone that is financed and don’t continue making your monthly payments the new owner may not be able to activate the phone on their network. Depending on the network carrier the buyer may not be able to use the phone they bought from you.

Some buyback companies will not buy devices that are blocked or blacklisted. Keep in mind that phones that are bad ESN are worth less. On average devices are 50% less valuable when financed.

Can I Sell a Leased Phone?

With some network providers, you are able to lease a phone to save on monthly payments. However, at the end of the lease, you would return the phone and upgrade to a new phone. In this case, you are not the owner of the device and can not sell it. At the end of your lease, you can opt out from upgrading and instead buy out the device if you wish.

What Happens if You Sell a Leased Phone?

As mentioned before, you can not sell a leased device as it’s not your property to sell. Yet, at the end of your lease, you can buy out the device and then sell it. If your device is no longer in a lease and paid for, you can sell it to We Buy Cell Phones.

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