iPhone 12 Monthly Installments

If I choose to trade in my iPhone 11 that I have yet to make a single payment on ($649), will I have to pay that off before the $350 credit goes towards the iPhone 12? Or when the iPhone 12 shows up on my monthly installments, will it just replace the iPhone 11 monthly installments? Because it seems like the iPhone 12 is just going to be a smarter and cheaper purchase for the same amount of space.