Yes, if it's paid off, then why not contact the carrier to "Unlock" it for you ??If you mean locked to a specific carrier (AT&T, Verizon, etc) they don't care. Any phone is fair game so long as it's paid off of course.
So Apple allows trade ins of unpaid phones from another vendor?A couple of years ago I bought a used iPhone X on eBay. It worked fine for a year, then I did a full wipe and reinstall of iOS. After that I could not get the T-Mobile SIM to activate in the phone.
I finally discovered that the phone was locked to Sprint and Sprint would not unlock it because the person who had sold it to me had not finished making the payments.
I traded it in to Apple at an Apple Store for $300 towards an iPhone 12 Pro. They didn't care - they were the ones who confirmed it was locked to Sprint.
Considering that it is Apple that actually inserts IMEIs into APPLE's unlock database (and not any carrier) I doubt they've got any problems with locked devices.
And in regard to unpaid devices - third parties like Assurant and Assurion have the tools to reprogram logicboards and issue new IMEIs and serial numbers. Why would Apple, who makes the iPhone, not have the same tools or better?