This phone bill calculator will help you determine how much money you’d be saving (or losing) from buying a phone directly with a monthly phone plan of your choice versus financing a phone through a carrier with a monthly phone plan through them. It takes into account the length of the contract for a financed phone, the interest rate on that financing, and what would happen if you were to put any money you’re saving into a savings account (with its own interest rate) over that same period of time.
Buying Phone Directly
The full price of the phone.
$
The price of your phone service/plan
$
/mo
Payment length [match the section below]
(months)
Total Price
$0
Carrier Phone Buying Plan
The full price of the phone
$
The price of required phone service/plan
$
/mo
Interest rate on your contract
%
The annual percentage rate (APR) applied to your loan
Length of your contract in months.
(months)
Monthly phone payment amount
$
/mo
Total Price
$0
Difference between buying outright and financing
Savings with outright purchase
$0
Interest rate of savings account
%
Interest rate of your money if put in a high yield savings account
Best Option
Total cost of buying a phone$0
Total Cost of Carrier Phone Plan$0
You will be saving $0 by buying your phone outright.
With TextNow's free nationwide phone service, you could save
Buying a new phone and shopping for the best phone plan is an overwhelming process with a lot of comparisons to track to find the best deal. We believe that phone service should not only be accessible (and free!) but also easy, which is why we put together this simple phone bill calculator to help you figure out how much you can save by either buying a phone directly at full price or financing it via a monthly payment. It’s not always so simple to figure out at face value and depending on the monthly plan you select, your total results may surprise you. So, let’s get into it.
Buying a phone directly
When considering buying a new phone, it’s essential to understand how different payment options—such as financing versus paying full price upfront—affect your budget. When calculating the total cost of buying a phone directly, you'll need to fill in three key details:
Full price of the phone (taxes included): Fill in the price of the phone you want to purchase, including any taxes and other applicable fees. Make sure to pay attention any fine print and if there are further discounts or trade-in offers that you qualify for, reflect them in the total price (reduce it to what you would actually be paying.)
The price of your phone service/plan: Whether you're shopping around for a more affordable phone plan, or sticking with your current one, put in the full price (again, taxes and any other applicable fees included) of the monthly price of your service plan.
TextNow Tip: Before you start shopping around for a phone plan, check out this list we already put together of the cheapest phone plans in 2025, so you can find the one that works best for you and your budget.
Payment duration: Most likely, you are not on a service plan that has a contract, but if you are, this is where you would fill in the length of that contract. If you don't have one, though, it's still important you consider it. When comparing to financing a phone later on, it's crucial that you compare apples to apples, so whatever the contract length of the phone financing plan is, use that to calculate the total price of buying a phone outright.
Financing a phone
Next, in this step you’re going to fill in all the details about the phone financing option(s) you’re considering. When filling out this section, do not try to skip ahead to the “monthly phone payment amount” and type in your own. This calculator is meant to do the calculation for you based on parameters like the interest rate you qualify for and the length of the contract. We’ll cover how to handle the resulting calculation if you specifically come upon a deal where the monthly payment is discounted below.
Full price of the phone: Start by filling in the full retail price of the phone as listed by the carrier (you can usually find it once you click through to the full details of the phone on their website).
Price of (required) monthly service plan: Fill in the price of the monthly phone/service plan you will have to use with this device. If you read the fine print on most phone offers, you will notice that a lot say something like “required ‘x’ plan/service.” This means that in order to be eligible for the phone offer, it’s required that you sign up for a certain monthly service plan as well. Of course, that plan usually starts at a minimum price that’s over $50, making your overall contract term potentially more expensive in the long run – which is exactly why this calculator is so important!
Interest rate on your contract: For the “interest” rate field, this is where you would fill in the interest rate that you qualify for. The advertised monthly payment rates for financing a phone are all assuming that you qualify for 0% APR (or zero interest on the financing.) However, that won't be the case for everyone. If you start the qualification process and are given an interest rate greater than 0, fill it in in this section. If you do qualify for 0%, type in “0.”
Length of contract: Lastly, fill in the length of the contract for the device financing. Most will range between 24 and 36 months.
Monthly phone payment amount: If your interest rate is 0, this calculation is very simple – you just take the total price of the phone, divide it by the contract length to get your monthly payment amount: Monthly Phone Payment Amount = Total Price of Phone / Contract Duration. If your interest rate is greater than zero, then you need to follow this formula to first determine your monthly phone phone payment amount for the phone only: Monthly Phone Payment= (Total Phone Price + ((Total Phone Price Interest Rate * (((Contract Duration/12)))/100))/Contract Duration. This is the one section of the calculator that can’t be edited manually. After you fill in all the fields above, the calculator will automatically do the math for you to determine what your monthly phone payment will be. To clarify, this is your monthly phone payment for the phone only. It does not include your monthly phone plan/service payment. That inclusion is in the Total Price that is calculated at the bottom of this section, which includes the monthly payment for the phone and the monthly payment for the service over the period of the contract (24, 36, or 48 months.)
*If you come across an offer where you qualify for a discounted monthly payment for device financing (eg. AT&T currently has an iPhone 15 offer for $5.99/month instead of $20/month), then you will need to do some manual calculation on your end to come up with the discounted total price. Let’s take the discounted $5.99 example:
Without the discount, at a 0% interest rate, the monthly payment for the phone is $20. The minimum required service plan for this offer starts at $76/month. So, for a 36-month contract, with a $76/month service plan and $20 monthly phone payment, your total at the end of that contract comes to $3,466.
If you wanted to know what that would cost with a $5.99 monthly payment instead, subtract that from the original monthly amount: $20 - $6 = $14. Now, multiply that difference by the contract term (36 months): $14 x 36 = $504. Those are your total savings. If you want to see the new grand total, just subtract this number from the original total: $3,466 - $504 = $2,962. Those are some great savings!
Difference between buying outright and financing a phone
Savings with outright purchase or phone financing: Once you have the totals for both options, you can compare to determine which option saves you money over the same length of time by doing a simple subtraction between the two numbers.
Interest rate of savings account: This section is optional, but we highly recommend you try it out! If you’re curious to know how much more you can save over the same period of time if you were to put the money you’re saving into a savings account, this is the place to find out. Just put in the interest rate of your savings account*, and it will account for the accumulated growth into the total calculation. So, now you know which option is cheaper for you in the long run, and how much more money you can make by choosing that option.
*This can also apply to any investment accounts you use instead. If your average return rate is, say, 10%, put that amount in as the interest rate.
Example of Cell Phone Plan Comparison
To put this all together for you, we’re going to use a real life example of how you would use this calculator to compare your options.
Find the phone you want to buy. If you're looking for the best deal on the latest iPhone, then let's assume that you're looking at a total retail price of $1,095.
Now, shop around for the carrier you would want to be with if you were to finance the phone – maybe one of them has a deal you're interested in.
Find out which phone service plan you want to use. It could be the same one for both options (buying outright or financing), or you can give yourself two options – one for buying the phone outright, and one that is (most likely) required if you were to take the carrier deal.
This step is optional – but we highly recommend it – figure out the best interest rate you can get on a savings account. If you'd prefer to dump money into an investment account instead, look up what your average return rate would be, if you don't already know it.
Using an iPhone 16 Pro as an example, with two phone service options: Unlimited Data Pass from TextNow for $39.99/month and the Value Plus VL plan from AT&T (part of the requirement for financing an iPhone 16 Pro) for $58/month, we can see which option saves us the most money in the long run.
In this scenario, assuming I qualify for the 0% financing, I ultimately save $684 by the end of the 3-year term by just buying the phone directly and finding a cheaper phone plan to use it with. Now, if you were to play around with this calculator and compare the two options with the same monthly plan, you’ll notice the totals are identical. So in that case, it will just depend on whether you have $1,000 to drop in one lump sum, and if you don’t, then device financing is a much more accessible option. Alternatively, if there is a trade-in offer that you qualify for and can get a discount on the phone – take $800 off of the retail price of the phone, for example – then you will get a result that shows you saving money with the financing option. But the trade-in offer has to be significant enough for that to happen, and this calculator can help you find that out by just switching out the numbers to see the resulting totals.
TextNow Tip: Take the work out of shopping for the best phone deal and check out our list of the best phone deals, updated monthly, so you never miss out on a deal.
How much should a phone bill cost per month?
According to JD Power, as reported by CNBC, the current average cell phone bill is $144/month. That adds up to almost $2,000 per year – money that can most definitely be better spent elsewhere.
The cost will ultimately depend on the type of phone plan you select, and for how many lines. Limited data plans are cheaper on average, with the cheapest for a single line starting at $10 for 2GB, ranging all the way up to $40 for 10GB. Unlimited data plans can range from $25/month for a single line all the way up to $100/month.
Phone Plan:
Data Included
Cheapest Phone Plan (/month)
Most Expensive Phone Plan (/month)
Limited Data Plans
<5GB
$10
$45
10GB+
$15
$40
Unlimited Data Plans
Unlimited
$25
$100
What should I consider when choosing a phone plan?
When picking out a cell phone plan, you should consider 4 things:
Data (limited vs an unlimited data plan).
The network (how good is the coverage in your area).
The network speed.
The price.
An honorable mention would be looking into postpaid vs prepaid plans. If you can handle network depriotization during times of congestion in order to have the flexibility to move between different plans, different carriers, and get a cheaper monthly bill, then prepaid would be for you. If you rely on network speed and don’t mind signing into a contract, then look for postpaid plans (offered by the “big 3” carriers– AT&T, T-Mobile, and Verizon.)
How can I lower my phone bill?
If you’re determined to make this year the year that you save money, and your monthly phone bill is a drain on your budget, there are ways for you to lower it.
Shop around for more affordable phone plans. You’d be surprised to find out how much value you’re still able to get from smaller carriers that offer similar services for much less.
Look into any further discounts you can qualify for. Anything from government programs like Lifeline to student or other specialized discounts certain carriers offer.
Add more lines. Oftentimes, adding more lines greatly discounts the monthly price per line of a plan. If you’re able to combine your service with family or a partner, you can all enjoy discounted service.
If you have any questions, or need help using our calculator, send us a note at [email protected]!
This calculator does not constitute financial, legal, or professional advice. The results are estimates and may not reflect actual costs, terms, or offers available from service providers. Please consult directly with your chosen provider to confirm the details of any plan, promotion, or service. TextNow, Inc. is not responsible for errors, omissions, or any outcomes resulting from the use of this calculator. Use of this tool is at your own discretion and risk.
