Still chatting with them on Twitter, they are saying you can't apply trade-in to EIP balance so that your net cost is $0.
If in worst cast you are able to apply trade-in to EIP balance, it will reduce net EIP balance. Since your monthly payment on EIP plan is always fixed $27.09 this will reduce number of months in which you will repay the loan.
Example.
iPhone 7-32gb EIP TOTAL = $649.99
Monthly = $27.09
Trade-in value for iPhone 6 = $165
If trade-in apply to EIP balance net balance left = $485
Now new number of months since EIP payment is fixed = $27.09
New number of months= $485/27.09 = 17.90 months
Tmobile credit which they apply to monthly EIP = $20.21 (because they already give you tradein of $165)
Rest you have to pay every month= $6.88
So you will pay $6.88 x 17.90 months = $123.15 more to TMO.
This is BS, clear case of cheating. Tell me if I'm wrong..
This is what sales rep told me when I order over the phone. Basically $165 is a credit that will go towards your T-Mobile bill. You can used that credit to pay for the service or for your monthly installments.
Once T-Mobile has received your old phone they will credit you $485 towards installments to the iPhone 7.
So $165 + $485 = $650