How debt payoff apps can help you
Debt payoff apps help you reduce and eventually eliminate your debt. The way this works depends on the app. Here are the most common features of apps to help you pay off debt:
- Payment planning: Gives you a step-by-step plan for paying off debt based on how much you owe, the interest rate, and your monthly payment amount. These apps often include different payoff options and compare their results. For example, the Debt Payoff Planner app lets you compare different strategies, including the debt snowball and debt avalanche methods.
- Automated debt payoff: Some of the most popular apps to help get out of debt automate the process as much as possible. Qapital lets you decide on a repayment strategy, and then handles loan payments for you. Oportun analyzes your checking accounts and makes withdrawals that you can afford to assign to the financial goals you've set.
- Technology does the heavy lifting: Forget about doing a budget spreadsheet by hand. Many apps can sync to your accounts, analyze your spending, and tell you what you need to know.
- Tracking and reducing spending: Debt payoff apps that connect to your financial accounts can record your expenses and make recommendations on how to budget. If you follow these tips, it could free up more money for paying off debt. Also, these apps can help you decide which debts to pay off first, like credit card debt and other debt with a high APR.
Learning about your options for managing debt and making goals to pay off debt can reap big benefits. By paying down your debt more quickly, you could save money on interest. You could also find ways to consolidate your debt.
Debt consolidation is when you get either a personal loan or a balance transfer credit card to pay off more than one debt. Then, you just need to worry about the single monthly loan or credit card payment, instead of multiple. Debt consolidation can be a good strategy if it helps you simplify your finances, get a lower interest rate, or both.
Another benefit of paying off debt is that it can increase your credit score. Debt can hurt your credit, especially credit card debt. Paying down your debt can help you build a good credit score. Some debt payoff apps even allow you to track your credit score.
How to pick the best debt payoff app for you
To pick the best app for paying off debt, think about what you need help with the most. After you answer that, you'll know which type of app to look for. Here are the most common examples:
- Are you looking for the fastest or cheapest way to pay off debt? A debt payoff app that lets you compare different payoff methods, such as Debt Payoff Planner, is exactly what you need.
- Do you have trouble paying more than the minimum each month? You should go with a debt payoff app that automatically saves money for you, such as Qapital or Oportun. These apps do the work for you -- all you need to do is set them up.
- Would you like to take a hands-on approach with your debt and be as involved as possible? A payment planning app would work well as a guide and to figure out a repayment strategy.
- Are you interested in an app to manage all your accounts and cut your spending? Try an all-purpose money management app. These apps typically let you set financial goals, like decreasing debt, and then make suggestions to help you reach them. In addition to debt payoff, they also give you one handy place where you can see all your financial accounts.
Since debt payoff apps work differently, it's all about finding the one that matches your needs. For some consumers, the best app is one that helps put more money toward debt payments automatically. For others, the best app provides a detailed debt repayment plan. Whatever you're looking for, there are plenty of apps available with the right features.
Typical debt payoff app fees and costs
Some debt payoff apps are completely free of charge, but others have fees. Monthly subscriptions are the most common type, and there may be the option to pay a yearly fee and get a discount.
Even when debt payoff apps have subscription fees, they're not very expensive. Most cost $5 per month or less. That's not a huge price to pay if the app helps you get debt under control, especially since you'll only need it until you finish paying off what you owe.