Buy a mobile phone from giffgaff with a peer-to-peer loan from RateSetter

Mobile network giffgaff is now selling handsets, which you can pay for upfront or with a peer-to-peer loan. How does it compare?

Giffgaff is a “mobile virtual network operator”, or MVNO, that operates on the O2 network, and is best known for its cheap SIM-only deals.

However, it’s now started selling mobile handsets too. You can pay for the latest phone upfront or on a monthly payment plan financed by peer-to-peer lender RateSetter.

We’ve taken a look at how giffgaff compares against the main networks if you simply want to buy a mobile handset for cash.

Sim-only deals

Giffgaff has made its name by selling sim-only “goodybags” which sell a set number of calls minutes, texts and data for between £5 and £20 a month. The sim cards work on the O2 network but are generally cheaper than going direct to O2.

The deals are pretty good. For example you can get 500 minutes, unlimited UK texts and 1GB internet a month for £10. You can buy top-up credit if you go over your inclusive minutes.

Up until now giffgaff customers needed to go elsewhere to buy a handset to put their sim into – but now that’s changed.

Handset offers

Giffgaff is now selling 20 different handsets which you can pay for upfront or on a monthly finance plan.

If you're new to giffgaff, you'll have to pay for at least a one-month goodybag to get hold of a phone, costing a minimum of £7.50. Existing customers don't need to do this.

The mobiles on offer range from the retro-style Nokia 301 for £71 to the high-tech Samsung Galaxy Note 3 for £599. You can’t get an iPhone from giffgaff at the moment though.

Unlike traditional pay-monthly phone contracts, the handsets are sold completely separately to the goodybag call plans. So you can change one or the other whenever you like and you know exactly what you’re paying for.

Compare mobile phone deals with Recombu

Price comparisons

Giffgaff sells 20 different handsets but we picked the five most expensive and five cheapest to compare to the other providers’ cash prices. The results are below:

As you can see the results vary, so if you’re planning to buy a handset outright, it pays to shop around.

However, it’s worth pointing out that giffgaff handsets all come unlocked, unlike those from other networks.

Finance

If you don’t want to pay for a handset in full upfront then you can get a loan from peer-to-peer lender RateSetter through giffgaff.

Loan terms range from six to 24 months and the longer the deal, the lower the interest rate you pay. There’s also the option to split your payments into an upfront payment and then monthly payments.

For example, if you wanted to buy a Nokia Lumia 1020 for £525 you might pay an upfront payment of £50 then £21.75 for 24 months (an APR of 9.7%). Alternatively you might pay £200 upfront then £57.88 a month for six months (an APR of 25.8%).

You can play around on the website to see what level of upfront payment and monthly payment suit you best.

The deals aren’t bad. And anti-establishment types can take comfort in the fact there are no banks involved as loans from RateSetter are funded by individuals rather than financial organisations. RateSetter does a soft credit check before approving an application and you’ll need to be over 18 to apply.

However, it’s not the cheapest credit available. In most cases you’d be better off putting the cost on a 0% credit card and paying it off before the 0% deal expires.

Compare mobile phone deals with Recombu

More on mobile phones:

TalkTalk launches cheapest sim-only mobile phone tariff

Giffgaff launches improved sim-only plan

What is peer-to-peer (P2P) lending?

EE launches pay-as-you-go 4G plans from £3 a month