The student debt crisis is being blamed for everything from millennials not buying homes to not starting families. With average student loan burdens ringing in at eye-popping levels, you can’t really blame those damn kids for altering their life patterns to make things work.
Fintech is here
Luckily, our friendly neighborhood fintech companies have noticed, and there’s a whole sector of new financial technology aimed at helping millennials tackle their debt without losing their minds.
But before diving into the wild world of student loan fintech, a word of warning. As we all saw with the whole Navient debacle, there are a lot of companies whose incentives aren’t quite aligned with yours when it comes to student lending, so don’t make any sudden moves before doing your own due diligence.
There are a lot of services out there to help you manage your student loans like a champion, but no one will pay as much attention to your money as you will. Plus, my bet is that your student loan debt is second only to a house in terms of the biggest purchase you’ll make in your life, so like, it pays to spend time looking into it.
Here are the options that are on the table for your student loans these days, thanks to advances in fintech.
First up, can I interest you in refinancing?
To refinance a loan, you used to have to go to your bank, sit down for a long, drawn out session, give them everything but your birth certificate, and even then you’d be pretty much stuck with the rate they offered you. At least, that’s what people have told me, because ain’t nobody got time for that.
These days, there are a lot of different companies that can refinance your loans to help you score a lower interest rate, lower monthly payments, or both. Both Student Loan Hero and SoFi offer a range of calculators to help you determine what kind of benefits you could net from a refinancing, from the comfort of your own home.
One thing to note, however, is that if it’s lower payments you’re looking for, and you’ve got eligible federal student loans, you need to check out the income-based plans you could score through your federal student loans. If you refinance those loans, you’ll miss out on existing federal programs that could net you the same effect.
Want help planning your repayment? There’s an app for that.
Depending on how long you went to school and where, your student loans might be a big chunk of your current monthly budget. Increasing the amount you pay, even by $15 a month, might feel like an insurmountable obstacle in the face of your new-grad budget.
It’ll start to feel a lot more manageable, however, if you see that the extra $15 will cut six whole months off of your loan payments. Imagine being free of your student loans for an extra six months! That might actually be worth skipping the three lattes per month, and that’s from someone who loves a good latte.
There are apps like ionTuition and Debt Payoff Planner that will help you calculate the impact of extra payments to your loan, and see how it’ll impact your timeline. If they don’t convince you to throw even a few dollars at your loans every month, I don’t know what will.
And of course, there are apps to help you – and your company – pay down your debt
One of the hottest employee perks out there right now is employers who help you pay down your student debt. (I know, where do I sign up?!) And, no surprise here, there are student loan fintech companies aiming to simplify that process.
Companies like Tuition.io are platforms that are built specifically to streamline the process of your employer adding money to help you pay down your student loans. Think of it like the contributions your employer make to your 401(k): You don’t really see the money, but it’s in the background working to improve your financial life anyways.
So fellow millennials, don’t worry: Thanks to fintech, there’s a good chance you won’t still have your student loans kicking around in your 60s, and we’ll probably all get around to establishing the lives we want.
Even if it does happen to be on a slightly longer timeline than our Boomer parents are expecting.
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