Rounding student loan debt can be a helpful way to manage your finances and pay off your debt faster. There are a few different apps that can help you with this, and they all work slightly differently. Some apps allow you to round up your payments to the nearest dollar, while others let you set a custom amount. There are also some that allow you to automatically transfer money from your checking account to your savings account every time you make a purchase, so you can start building up a buffer against future debts.
Looks like a little goes a long way with Fifth Third Momentum app. In a recent announcement on Business Wire, Fifth Third claims its app has helped customers pay down $1 million in student loan debt. According to the announcement, the program works like this:
“The app allows users either to round up debit card purchases to the next dollar or to add $1 to every purchase. The extra amount is then applied to the balance of a designated student loan. Payments are made on a weekly basis once a minimum of $5 is rounded up.”
This is not a new concept, as we have seen others in the marketplace implement similar “rounding up to save” schemes before. What is interesting about this news is that it echoes the payments professionals’ opinion that consumers want products and services that help not only to manage their finances but also to better understand them. This app uses gamification to keep users engaged.
““Our customers tell us that they love how using the app is actually fun. They get badges as encouragement when they hit certain milestones or payments as they make extra payments toward their loans,” said Melissa Stevens, Fifth Third Bank’s chief digital officer. “It feels great to create a solution that’s integrated into our customers’ lives, and we’re so happy to have helped our customers already pay down $1 million in student loan debt.””
While this instance caters to paying down student loan debt, I would not be surprised to see more financial institutions applying this model to the individual financial goals of their customers.
Overview by Ryan McEndarfer Editor-in-chief at PaymentsJournal.com