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Paying off student loans can be difficult. That is why there is a new student loan app called Pickpocket that is designed to help you pay student loans back. Most college graduates end up making payments every month for years, whittling down their balance just a little at a time. Some can afford to make more than the minimum payment, while others can’t scrape up the money for a full second payment every month.
Pickpocket is a new startup app that seeks to help student loan borrowers pay off student loans faster. Started in February 2018, it went live soon after and is currently accepting people on its waiting list for signup.
Pickpocket works by analyzing your spending and taking a small percentage of each purchase to apply to your student loans. It can be linked to a bank account or credit card and tracks your spending to decide how much to pay on your loan. It’s free to get started and after a few months the monthly subscription is $4.99. We will go over the benefits and downsides in this Pickpocket App review.
Benefits of the Pickpocket App
The app defaults to a ten percent savings rate, however, you can set a custom rate with the minimum being five percent. If you make a twenty dollar purchase with your debit or credit card, for example, Pickpocket will take an extra two dollars and send it in as a payment to your student loans. While it doesn’t sound like a lot, it’ll do that for all purchases up to five-hundred dollars. When you think about how many purchases you make in a day—groceries, gas, dining out, or shopping—you can see how fast those extra payments could add up.
You can skip a transaction if you need to, such as if you don’t want it taking ten percent of a large purchase you have coming up. Pickpocket’s website says the company has safeguards in place to ensure that your account will never be overdrawn as a result of its practices.
You can also send yourself a “boost” if you find some extra money and want to put it toward your loans. Even better, Pickpocket offers the ability for you to get matching sponsors. If your parents or grandparents want to match your savings (up to a limit they set), Pickpocket allows them to sign up to automatically match your savings with their own.
Downsides of the Pickpocket App
Pickpocket has a few downsides, depending on how you feel about privacy. In order for the app to work, you’ll need to give your credit card or banking information. What’s more, finding information about who’s behind Pickpocket is a bit difficult. Its website doesn’t list any of the people behind it, and it’s such a new product that there isn’t much information about it yet. For some student loan borrowers, that lack of information might make Pickpocket something to wait and see on before jumping in.
Alternatives to Consider
In addition, if you’re a new college graduate, you may want to consider focusing that extra money into alternative endeavors such as building an emergency fund or getting started with your employer’s 401(k) program instead. An emergency fund can help keep you from racking up debt if you have an unexpected expense.
Also, waiting to start saving for retirement can cost you thousands of dollars later. It’s better to get started early by contributing to your 401(k)—hopefully being matched by your employer— which will be accruing and compounding interest, making you money even if you aren’t actively contributing as much to the account. Then, when you have more income later, you can start pushing your extra funding to your student loans.
Pickpocket is a great little student loan app if you could use some help cutting back on frivolous purchases and would rather put that money toward your student loans. It’s also great if you have family members who want to contribute a little, but don’t want to take on a full payment. If you have concerns about linking your bank accounts or credit cards to a third party, or if you prefer to work with companies that have published names and faces behind them, then Pickpocket might not be the best choice for you.
Author: Jeff Gitlen