You must not have missed it: the “free” phone is no longer. In fact, the free telephone never existed. Because you simply paid off the telephone via the monthly costs for your subscription.
In fact, it has always been an installment purchase. And now really. Because if you choose a telephone of more than $ 250 with a subscription that lasts longer than three months, it is considered a loan. What does this mean to you?
Insight costs telephone on installment
Borrowing money costs money. And how much that is with a telephone subscription, the telecom providers must tell you. By stating the costs for the loan and for the mobile phone separately. This way you can better compare a subscription with and without a telephone.
Telephones that cost more than $ 250 with a subscription of more than three months are registered with the Credit Registration Office (BKR). If you want to take out a new loan, the lender will always check with the BKR to see if you have any more loans. The bank will take your telephone credit with you when determining your borrowing capacity. In this way, the BKR protects consumers against over-credit.
More personal information required for telephone subscription
To be able to provide a telephone credit, telecom providers must comply with the Financial Supervision Act (Wft). This means that they can only sell a telephone and subscription if this is justified. Therefore, they will also ask about your income to evaluate whether you can bear the monthly charges.
Borrow less money in a mortgage
I just briefly mentioned that a telephone credit has an effect if you apply for a loan or mortgage. Very good, I think. But it also has a downside.
Because the mortgage shop calculated that someone with an income of $ 25,000 and telephone costs of $ 15 per month can borrow more than $ 4,000 less. And for a household with four telephone loans and two incomes, this minimum amount increases as much as $ 16,000.
Good old sim only
I think – and hope – that people will look more critically at their telephone subscription. Buying on installment is the most expensive form of borrowing money. A normal loan such as a Personal Loan or Continuous Credit is often much cheaper. So never blindly choose a telephone credit, but compare the options. And maybe we should just opt for the old-fashioned sim-only thing more often.