How to Use Budgeting Apps to Pay Down Your Loans
Where would we be without the dozens of apps that live on our smartphones and manage our daily existence? From apps that make it a cinch to order food to those that allow us to adjust our home thermostat or track physical activity, it's becoming increasingly difficult to remember life prior to having all of this useful, life-hacking software at our fingertips.
Apps in the personal finance space, in particular, are proliferating at a staggering pace. There was a 90 percent increase in installation market share of money management apps worldwide in 2019—and by the end of that same year, financial apps represented the second largest category of apps in existence.
It's no wonder, really, given that fin-tech apps can assist with everything from budgeting, banking, investing, and negotiating bills, to eliminating subscriptions, and squirreling away spare change. More to the point for this discussion, though, there are also numerous apps available to help us attack and eliminate loan debt, whether that be a personal loan or a student loan. Yes, here too, apps can be your bank account's BFF.
"Apps are a great way to tackle paying down debt. Many link directly to your accounts, ensuring there are no discrepancies in your numbers and that your payments are, indeed, processed," says Erica Seppala, financial analyst for Merchant Maverick, a comparison site that reviews software and services. "Many apps feature calculators, allowing you to tweak the amount or frequency of payments, that way you can see in real time just how quickly you can potentially pay off debt."
Need some assistance accomplishing debt reduction goals for 2021 and beyond? Here are seven apps that financial experts say are particularly useful at managing this task.
Cash back apps can also be helpful on your loan repayment journey
One parting note on the app front. When you're focused on paying down loan debt more quickly or aggressively, maximize the cash back you're earning on everyday purchases, so that you have more money to put toward that loan debt, says money saving and budgeting guru Andrea Woroch.
"Regardless of how much you try to scale back on discretionary purchases, there are still items you need to buy no matter what, so make sure you're maximizing cash back," Woroch says.
A cash back plug in like Cently automatically adds coupons and cash back to your online cart whenever you're shopping online. It works at thousands of stores, including Amazon.
"When you earn cash back on your purchases, put the savings to work by making an extra loan payment, even if it's a few bucks," Woroch says. "Every little bit adds up."