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Thanks to a booming finance app industry, there are a variety of ways for consumers to leverage their smartphones to take control of their bank accounts, bills, and even their debt.
The newest app to join the crowd is the Sum-it app. Though it has not yet launched, Sum-it will help users repay their student loan debt through everyday spending, like grabbing that much needed morning cup of coffee or stocking the fridge with groceries.
How to Pay Down Student Loan Debt Using Sum-it
Similar to some other savings apps, like Acorns, Sum-it uses round-ups to help users pay down their student debt. When a user makes a purchase using a linked account (credit or debit card), Sum-it will automatically round up the purchase to the next dollar, using that extra money to make additional monthly payments towards the user’s student debt.
Account holders aren’t the only ones who can use their daily transactions to chisel away at their debt balances. The new app also advertises the opportunity to link other “contributors,” or the accounts of friends and family members who want to use their spending patterns to help users work towards a debt-free life.
How can this help? The Sum-it site currently boasts that even adding $50 a month can save you thousands of dollars on your student loans by reducing the amount of time it takes to pay off existing debt. This notion is backed up by a general scenario that assumes the average student debt holder has approximately $28,000 in debt and just by collecting and paying an extra $50 per month, the loan period will decrease by about 2 years, yielding a $2,060 savings in interest.
Should You Consider Sum-it?
Since Sum-it has yet to launch, there isn’t much feedback in terms of how beneficial the app will be, and it’s hard to really provide a complete Sum-it review.
However, those who are interested in learning more can visit the site and sign-up. Upon signing up, which at this point only requires an email address and a general proclamation of existing student loan debt, applicants will receive a message alerting them that they’ll be notified when the app launches, though an official launch date is not currently available.
Without too much insight into the inner-workings of Sum-it, it’s hard to make a final judgment on its success. However, the premise seems strong and the app can potentially provide a hands-off way to pay down debt, something anyone with student debt could likely appreciate.
If you’re interested, it doesn’t hurt to sign up for notifications, as there is no transfer of account or personal information aside from your email address and general debt amount. On that note, we’re looking forward to learning the answers to the following questions before we climb on board, and we suggest you do as well.
- What type of security measures will be in place? Users will presumably be sharing sensitive information, and as such should be curious about how the company plans to protect that info.
- Can you increase your round-ups or add weekly lump sums?Companies like Acorns allow users to double, triple, etc. their round-ups or select an automatic, regularly occurring withdrawal amount. For those with a lot of debt, that option would be helpful.
- Are round-ups taken immediately or compiled over the week? Month?If you want to manage your budget, you’ll need to know if the round-ups are withdrawn with every transaction or if they are compiled and withdrawn at one time.
- How will the app handle multiple loan accounts? Many borrowers have federal and private loans, which means some also have multiple loan servicers, leading us to ask how Sum-it will handle this common scenario.
- Can you pause your account at any time? If your budget is a little tighter than normal, you may not want to part with that extra change. Hopefully Sum-it has some precautions in place for such a scenario.
In all, Sum-it seems like a helpful app that can help many student loan holders pay down their debt in a fairly non-intrusive way. Though the app isn’t quite ready to launch, we’re looking forward to learning more and providing our readers with a full Sum-it review when the time comes. Until then, keep an eye out, and be sure to consider the questions above before you dive in.
Author: Jeff Gitlen