Paying off your student loans may seem like an incredibly difficult feat requiring a superhuman amount of discipline and budgeting prowess. But sometimes, the small things can have a big impact on your progress.
What if you could put the power of your spare change toward your student loans to expedite your repayment in a simple, effortless way? That’s the goal behind the new app Spared.
Spared is a soon-to-be released app that puts your spare change to good use.
“The app rounds all user transactions up to the nearest dollar and pays that ‘spare change’ directly toward the user’s registered student loan of choice,” says Ryan Lockwood, the company’s cofounder.
According to their website, users save an average of $9,000 in interest and cut down their repayment time by seven years.
How does it work?
Spared uses Plaid, the same financial software used by Venmo, Wealthfront, Acorns, and more, to monitor users’ bank accounts.
Through this financial technology, the company is able to review your transactions and round them up to the nearest dollar. Using that “spare change,” you can automatically put small amounts of money toward your student loans to pay them off faster.
Spared makes it easy to put some extra money towards your loans without a lot of effort. After all, it’s unlikely you’re going to miss your spare change.
By default, the app uses the debt avalanche method, meaning your spare change is put toward your student loans with the highest interest rate. However, users can change this and select which student loans they want to focus on.
How Spared can help student loan borrowers
Paying off your student loans can seem like an uphill battle. Deep down you know you need to put more toward your student loans each month, but actually doing so can be a different story.
With so many things vying for our attention and dollars, making your student loan payments a priority is tough. Using Spared, you can effortlessly put more money toward your student loans.
“We all know how critical making more than the minimum payment is when attempting to pay off student loans,” says Lockwood. “By automating the process and paying small amounts of money over the course of the month, the pain of that one-time, larger transaction is removed.”
By taking away the decision-making required to make additional student loan payments, users can focus on other things while putting more toward their student loans.
How to use this service
Spared will launch their web application in mid-January (just in time to help you get started on those New Year’s goals!). For now, you can sign up on their waiting list and be notified as soon as they launch. As part of the process, they are giving away $1,000 to a student loan borrower who refers their friends.
“[Users] can try to work their way up our referral leaderboard for a chance at $1,000 applied to their student loans,” says Lockwood.
Though the web application is set to launch in January, the mobile app will launch some time in the first quarter of 2017.
How much does it cost?
Spared is completely free. Users simply need to link their student loans to start putting their spare change toward their debt balance. While their basic service is free, if you want to allow family members or friends to contribute to your student loan payoff, a nominal fee will be charged.
“Activating premium services will allow the user to open their account to outside contribution from family [and] loved ones, and will cost the user $1 per month,” says Lockwood.
Though it does cost a small fee, having your family, friends, and more contribute to your student loan payoff could be an easy way to pay off your student loans faster.
What you should know about Spared
Spared can help student loan borrowers make additional payments, but it’s not a replacement for making your regular student loan payments. You should still pay the minimum each month. If you’re having trouble making payments, get in touch with your loan servicer.
If you can afford to put even more toward your student loans, don’t just rely on the spare change method to pay off your debt. Making big payments can make a bigger impact.
Though Spared is a free service, they do make money by referring other products and services to you.
Put your spare change to good use
If you want to pay more toward your student loans with little to no effort, Spared is a great way to do just that. Use Spared as a supplemental tool to pay off your student loans, but not as a standalone strategy.
If you’re looking for big wins, don’t forget to pay more than the minimum. Additionally, consider making multiple payments each month to cut down on interest.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|