Student loan levels have grown over the years and are now a national topic of concern. In a bid to help students manage them, financial technology (FinTech) firms have developed packages for students to use to approach settling these debts. Here are a few examples of how FinTech is helping students reduce their loans.
Comparing Private Student Loans
FinTech companies are helping students find the most suitable private student loan by providing transparency in information. These firms have been creating a marketplace for students to aggregate data on these loans and compare them.
Providing a snapshot of the market promotes financial literacy among students which ultimately helps them avoid any potential extraneous debt. Due to the availability of this information, students are able to make informed decisions on how to best consolidate their loans.
Helping Pay Down Student Loans
Some FinTech companies have taken the bold step and chosen to help students find ways to pay down their existing loans. These firms provide an online platform that lets the student receive freelance work that generates an income for them. Once the user gets paid, the money they earn goes straight to paying off their student loan.
Other FinTech providers help students pay off their loans through the small change they receive from their transactions. They provide a service where they round off every transaction the student performs from their account and send the difference to paying the loan.
While Sallie Mae and several big lenders also have their own programs to aid students in settling their debt FinTech firms are also taking up the challenge.
FinTech companies are helping clients know how much they have and can spend to help clear their student debts. These providers design software that syncs with the client’s account to help them set up a budget. From this vantage point, clients can know how to best navigate their finances to continue making payments on their student debts.
It would be nice to avoid all debt when deciding to go to college or trade school. Unfortunately, almost everyone must borrow money to be able to afford the large sum of money that is required to pay tuition costs. In addition to these expenses, there are also housing expenses, books and technology, and other things that are required for your degree.
There are always extra expenses that you don’t think about like uniforms or special equipment as well as tools of the trade for your career as you get closer to graduation.
You can never have too much money, and that is why it is good to look into your options. When you borrow money, make sure you only take out the amount that you can pay back on a salary you expect to make once you have graduated with your degree. No one knows exactly what their job will be, but it doesn’t hurt to look around at the salaries that different careers offer on average so that you will know how much of a loan you can afford to pay back every month.
Don’t get in debt over your head. That is the key to remaining on the positive side with your finances once you have graduated so that you can keep most of the money you make. Don’t fall into the trap of borrowing so much that it becomes an overwhelming burden for you after you are done with school. Using private lending institutions rather than government-related ones is a good idea as well as using other forms of credit and resources to avoid overwhelming debt.
Student loans are becoming a heavy burden. FinTech service providers are using technology to disrupt this area and deliver value to students while also generating returns.