Forum Discussion
How T-Mobile Calculates Monthly EIP Costs
Greetings. I am not (yet) a T-Mobile customer. I have a question about purchasing a new phone from T-Mobile.
In the first attachment, I show that T-Mobile is offering a $1,000 promotion for my trade-in - the Samsung Galaxy S23 Ultra 5G in good condition - if I purchase a new Samsung Galaxy S25 Ultra on an EIP.
In the second attachment, I show that the full retail price of the S25 Ultra with 256GB of storage $1,299.99. Thus, if I apply my $1,000 promotion, I should pay $299.99 for this phone after all is said and done.
The second attachment also shows that my monthly payment for the 24-month EIP will be $20.83. But $20.83 x 24 months = $499.92, not $299.99!
It's a little misleading, however, because T-Mobile actually doesn't apply the $1,000 promotion evenly over the 24 months of the EIP. According to T-Mobile's website, I'll get a one-time bill credit of $320, and the $680 balance of the promotion with be divided evenly among the 24 months of the EIP. Let's see the arithmetic in that case:
$1,299.99 - 320.00 = $979.99 - 680 = $299.99 / 24 months = $12.50 per month. This is less than the $20.83 per month that T-Mobile advertises!
So my question is: How does T-Mobile calculate a monthly payment of $20.83??
This question has stumped three different T-Mobile customer service reps, but then I shouldn't expect them to know anything about the calculation of monthly costs, since their purpose is to sell and that is how they are trained.
Can anyone explain how the $20.83 per month is calculated?
T-Mobile's Equipment Installment Plan (EIP) and promotional trade-in credits can sometimes be a bit tricky to understand because they separate the device cost from promotional credits. Breakdown of the Calculation: Full Retail Price of the Phone: The Samsung Galaxy S25 Ultra (256GB) costs $1,299.99. Trade-In Promotion Breakdown: T-Mobile provides a $1,000 trade-in promotion, but it is split into: A one-time bill credit of $320. The remaining $680 is spread over 24 months as monthly credits. How T-Mobile Structures EIP Payments: The full device cost ($1,299.99) is financed over 24 months, so the base monthly EIP payment is: $1,299.99 ÷ 24 = $54.17 per month. Then, the $680 promotional credit is applied in equal portions over 24 months: $680 ÷ 24 = $28.33 per month. Your actual monthly bill reflects both the EIP charge and the credits: $54.17 (device installment) - $28.33 (monthly credit) = $25.84 per month. However, when the one-time bill credit of $320 is factored in, it may reduce an early bill amount but doesn't directly affect the recurring monthly EIP charge. Why the Advertised Amount is $20.83 Instead of $12.50? The key confusion comes from assuming that only the remaining $299.99 should be spread over 24 months. Instead, T-Mobile finances the entire device price and applies trade-in credits separately.The actual net monthly cost you pay for the phone (after bill credits) should be close to $20.83, but the EIP itself remains $54.17. Summary: T-Mobile finances the full retail price over 24 months. Promotional credits are applied separately rather than reducing the financed amount upfront. The one-time bill credit of $320 affects the total cost but does not change the structured EIP payments. The final monthly cost after credits should be $20.83, which is consistent with how T-Mobile structures these promotions. Hope this helps clarify how T-Mobile calculates the monthly EIP payment!
You have explained the calculation that is described on T-Mobile's website. While I appreciate your participation, my original question was "Can anyone explain how the $20.83 per month is calculated?" and the fact is ... nobody can. Not the several T-Mobile customer service representatives with whom I spoke, and not the several T-Mobile stores I visited.
Since $20.83 per month is clearly wrong, as I describe in my original question, it cannot be what I would actually pay if I went ahead with this purchase.
I have been a T-Mobile customer for many years, so I know from experience that no matter what it says on their website, and no matter what any of their customer service representatives assures you over and over, you will not know what you will actually be charged for a phone until you get the bill.
This time around, I'll buy my phone directly from Samsung, where nothing more complicated than long division shows that the monthly charge I will pay is exactly what it says on their website. And the phone will be unlocked from the first day.
