With just your smartphone, you can make some extra money, file your taxes and — yes — even refinance your student loans. In fact, with the app Pillar, you might also be able to organize and repay those school loans ahead of schedule.
Debt repayment mobile apps have been around for years, but Pillar stands out for its promise to help whittle down your loan balances, partly by analyzing your income and spending patterns. The free app claims to trim $6,200 and four years off its average customer’s repayment.
“Pillar is great for people who are transitioning from one stage of life to the next,” CEO Michael Bloch told Student Loan Hero. “For example, if you get a raise or work extra hours of overtime, Pillar helps you figure out what to do with the extra cash.”
Specifically, we’ll cover:
- Pillar student loan app review: The basics
- Pros and cons of using Pillar
- Should you manage your student loans with Pillar?
Its app is available on iOS or Android devices, but note that Pillar is not a student loan company — it doesn’t lend money, nor does it refinance your loans.
Instead, it aims to help you pay down your debt by offering you the ability to organize, track and repay your loans in one place.
You would connect your federal and private loans by searching for your lender within the app. You could also integrate your bank accounts to activate Pillar’s advice-giving function.
From there, notifications would arrive, outlining smart steps to take with your debt. For example, you might be advised to make an extra payment during a month where your spending is low.
Much like the beginnings of Student Loan Hero, Pillar’s are personal. Bloch battled student loan frustration on two fronts within his own household.
“My wife graduated from law school with over $300,000 of debt,” Bloch wrote in announcing the building of Pillar on the company’s website. “Soon after she graduated, I started at Stanford Business School, where I planned to take on another $250,000 of student loans. We spent weeks researching how we were going to pay those loans back.”
Left unfulfilled by the available solutions, Bloch founded Pillar. Here’s what we like about his company’s progress to date, plus some other facets that might still need some work.
Pro: Optimize your monthly payment
For student loan borrowers who feel too overwhelmed to budget loan payments, Pillar proposes the idea that small steps eventually result in significant gains. It seeks even tiny amounts of savings during low-spending months and nudges you to redirect those funds toward your outstanding loan balance.
Our extra payment calculator shows that every little bit does, in fact, help. For example, if you’re paying $100 a month toward a $10,000 balance to be repaid at 7.00% interest, but you put down the $200 from your birthday check, you could shave five months off your repayment.
Pillar would do this budgeting for you and then encourage you to take action.
Con: You might have to wait in line
As Pillar gets off the ground, you might be left standing in line. As it’s being fine-tuned, the app is onboarding users in the order they’ve downloaded it and completed their profile, creating a lengthy waitlist. (When I signed up in August 2019, I was placed 9,145th on the list.)
Once you’re off the waitlist, however, you should be able to connect your federal loan servicer account with ease. I was able to locate all but one of the Department of Education’s nine loan servicers (with only OSLA Servicing seemingly missing).
Con: Not all borrowers are best served by the app
Although Bloch wants every student loan borrower to download Pillar, it might not be so useful for all types of borrowers — at least in the app’s current stage of development.
As of August 2019, the company said it was still developing tools for borrowers who wanted to decrease their monthly dues or pursue forgiveness programs. (It also hinted at charging a nominal fee to use its services in the future.)
Even if you’re the type of borrower that’s currently a good fit for the app, be aware that Pillar doesn’t truly allow you to make a single monthly payment — Pillar itself suggests you still make your monthly payment directly to your loan servicer, lest you lose any interest rate reductions for being enrolled in autopay.
Finally, there’s no credit score component of the app, so there’s no way for Pillar determine your fit for student loan refinancing — a measure that would consolidate your debt and could reduce your interest rate.
Con: Automated student loan ‘counseling’ isn’t always wise
If you detest your federal loan servicer or have had a falling out with your private lender, you might be desperate for objective student loan advice.
Pillar says it’s unbiased in its advice because it doesn’t make money when you fail in repayment, as some lenders do.
“Pillar users are looking for someone to handle the paperwork behind the scenes,” Bloch said. “They want to be presented with relevant options so they can make smart choices for themselves.”
Although the advice-generating part of the app is made via machine learning, Bloch said human judgement plays a key role.
“We’ve worked with various student loan experts and financial advisors to develop our recommendation engine,” Bloch said. “By analyzing people’s unique financial situations, we’re able to provide custom recommendations that we believe are best for each individual.”
However, that automated nature of the app may come with less flexibility than you might desire. For instance, Pillar takes your leftover cash and applies it to your loan balances, using the debt avalanche method. If you prefer debt-snowballing your student loans, the app might not be right for you.
Or at least for now. This could change, as Bloch said that “Pillar will offer the snowball method as an option in the near future.”
Although in its infancy, Pillar has garnered a lot of attention — plus $5.5 million of funding — and for good reason. It has the noble goal of helping student loan borrowers end their debt early.
In its current form, however, the mobile app isn’t a must-download. So far, It has yet to address some of the common repayment pain points, including the chase for lower monthly dues or long-term forgiveness.
More successfully, however, it has helped borrowers with spare change to make extra loan payments, cutting down on interest. But Pillar isn’t your only option when it comes to this feature, as you could also…
- Make extra monthly payments on your own with a beginner-level budget
- Track your loan repayment using other tools like My LendingTree (Note: LendingTree is the parent company of Student Loan Hero.)
- Divert monthly savings to your debt through alternative finance apps like Qoins
On the upside, meanwhile, Pillar is easy to use and could be just the nudge you need to optimize your student loan repayment. In fact, the company plans to eventually offer a similar service to borrowers with credit card and other debt.
Still, even if you choose to wait in line for the app’s latest enhancement, also start moving on other strategies to repay your student loan debt.