PER­SONAL FI­NANCE APPS HELP MIL­LEN­NI­ALS PAY OFF LOANS

Austin American-Statesman Sunday - - BUSINESS SUNDAY - Per­sonal Fi­nance Su­san Tompor

What if every time you ordered a spicy tuna roll or tried a new craft beer, you could set aside an ex­tra dol­lar or so to put to­ward your stu­dent loan debt?

It’s a strat­egy that might work for many mil­len­ni­als. A new app, for ex­am­ple, al­lows Fifth Third bank­ing cus­tomers to link their debit cards to stu­dent loans held by more than 30 ma­jor loan ser­vic­ing firms.

You could agree to round up that $8.35 for lunch to $9 on your debit card and throw an ex­tra 65 cents to­ward your stu­dent loans. Or round up the pur­chase to $9.35 and throw a dol­lar to­ward your debt.

Sure, any­one can put ex­tra change and loose bills in a jar at night, count it up each month, take it to the bank and then write an ex­tra check to­ward stu­dent loan debt. But who’s go­ing to feel great do­ing that drudge work?

When it comes to bank­ing, Fifth Third said, mil­len­ni­als want a prod­uct that’s “pos­i­tive, ap­proach­able and cel­e­brates their wins.”

Smart fi­nance apps are all about of­fer­ing im­me­di­ate so­lu­tions that fit eas­ily into a con­sumer’s life­style and makes the most of that mo­bile moment.

“It’s bud­get friendly,” said Nick Sky, 29, a founder of ChangEd, an app that was in­tro­duced this year to help bor­row­ers throw their spare change at stu­dent loan debt.

Here’s a look at some of the apps and re­wards for pay­ing off stu­dent loan debt:

Momentum

Fifth Third rolled out what it calls the Fifth Third Momentum app this month to help its cus­tomers round up ex­tra pay­ments for stu­dent loan debt.

To get started, Fifth Third bank cus­tomers can down­load the An­droid or Ap­ple app and en­ter the name of the in­sti­tu­tion ser­vic­ing the stu­dent loan.

Once the loan is con­nected to a Fifth Third debit card, cus­tomers can choose to round up their debit card pur­chases to the next dol­lar or add one dol­lar to every pur­chase.

You can­not use the app to make ex­tra ran­dom pay­ments, say an­other $30 or $40 here and there. It’s only a tool for round­ing up those debit card pur­chases. But Fifth Third said that once $5 in pay­ments for those stu­dent loans is ac­cu­mu­lated, the money is au­to­mat­i­cally sent to the stu­dent loan ac­count at the end of the week.

Fifth Third es­ti­mates cus­tomers who round up $25 a month us­ing this app could pay off a 20-year stu­dent loan three years sooner and pay 8 per­cent less over­all by avoid­ing ex­tra in­ter­est that would have ac­cu­mu­lated. The num­bers are based on a loan amount of $37,172 with a fixed in­ter­est rate of 6.8 per­cent.

Upromise

A loy­alty pro­gram called Upromise by Sal­lieMae of­fers cash-back re­wards that can be used to­ward pay­ing down el­i­gi­ble stu­dent loans.

You’d need to sign up for the free ac­count and make pur­chases at spe­cific re­tail­ers, travel sites and on­line stores. You’d need to reg­is­ter your credit card to se­cure some points. But if you don’t want to reg­is­ter your credit card, it’s pos­si­ble to shop on­line at Upromise.com and still earn points.

Only the bor­rower can link Upromise and stu­dent loan accounts. Not all stu­dent loans are el­i­gi­ble. See Upromise.com/ loan­link for de­tails. Upromise ac­count bal­ances of $10 or more will be au­to­mat­i­cally trans­ferred on a monthly ba­sis to the linked stu­dent loan ac­count.

Su­san Tompor is a per­sonal fi­nance columnist for the Detroit Free Press.

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