For those with a limited disposable income, having to buy a new phone can be an unwelcome expense. If you also have a poor credit history, it can be difficult finding a suitable way to pay for it. While many may opt for mobile phone contracts, you have to have a good credit rating to be able to apply, which can restrict the accessibility of this affordable option. So how can Polar Credit help you buy a phone?
Polar Credit offers an unsecured personal line of credit to help you manage your cashflow from time to time and spread the cost of large, unexpected expenses. In an ideal world, you would be able to save up in advance of any expensive purchases in order to minimise the impact on your finances. But this isn’t always possible, and when it comes to something important like a phone, finding the cash is hard. Harder still is recovering your budget if you have to pay out a lump sum to purchase the phone outright. It could cause you financial difficulty with everyday spending or even affect your ability to meet your financial commitments on time.
A credit line would allow you to buy the phone with borrowed funds, and then repay the borrowing over as many months as you need so you can manage the repayments without risking your existing essential expenditure. A credit line requires only a minimum payment each month, though you should aim to repay as much as you can afford to reduce the amount of interest that accrues. At Polar Credit, the minimum payment is made up of:
Flexible payments can be an especially useful feature if you have a variable income or if you’re self-employed and have to rely on clients paying invoices on time.
Plus, instead of being tied into a two-year contract with a mobile phone company, you could repay the balance over six months, for example – whatever is affordable in your financial circumstances – freeing up the funds for personal use after the balance is repaid.
Credit lines often consider people who have been declined by mainstream credit, so even if you’ve had difficulty repaying credit in the past, or you have a thin credit file because you’ve not borrowed before, you might still be able to access credit to help you with normal expenses like buying a new phone. A credit line application is assessed in the same way other credit is – with affordability and creditworthiness assessments – but credit line lenders have slightly different criteria which means you won’t automatically be declined if you have a low credit score.
Other borrowing options might include payday loans, but while small personal loans for people with bad credit can help, usually the repayments are larger than the minimum payments on a credit line for the same amount borrowed, and the interest rate is higher. Ultimately, you need to choose a type of credit that works for you, but it’s good to know the options that are available, especially if you can’t access mobile phone contracts.
Borrowing any type of credit comes with financial risks so even if you’re fairly certain you can afford the repayments, it’s best to do a quick check of your budget and upcoming expenses just to make sure. If you can save in advance for a phone, this would be the most sensible option so you can avoid paying interest and charges altogether and be risk-free of missing any repayments which could make it harder to obtain loans and credit in the future.
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