A local Fifth Third Bank branch in Chicago, Illinois. The bank recently released their student loan repayment app.
Fifth Third Bank, a Cincinnati-based bank, has launched the Fifth Third Momentum app that will assist student loan borrowers in repaying their educational loans as fast as possible, according to a press release published on September 5th.
The app works by making automated micropayments to a student loan borrower’s student loan balance. Any student debtor that banks with Fifth Third Bank will be able to link up their Fifth Third debit card with their student loan servicer account. More than 30 student loan servicers are partnering with the Cincinnati bank to make the Momentum app a useful tool in paying down student loan debt.
The Momentum works in one of two ways depending on the preferences of the student loan borrower. The student debtor can choose the round-up option, which will round-up all purchases made with the Fifth Third debit card to the next dollar amount. The extra cents from the round-up would then be put towards the borrower’s student loan balance. Or, the borrower can choose to have one dollar tacked on to each purchase they make with the Fifth Third debit card.
Either way, the extra amount from either option will be put towards the student debtor’s loan balance once at least five dollars in round-ups is collected. Once at the minimum amount, the payments will be made weekly.
Melissa Stevens, the Chief Digital Officer at Fifth Third Bank offered the following statement for the press release: “We wanted to offer a solution that would help people pay off their student loans faster and make them feel good while doing it. We aimed at creating an intuitive solution that was integrated into their daily lives instead of something that would feel like they needed to come to us.”
In their own estimates, Fifth Third Bank predicts that student loan borrowers will be able to put together $25 each month using the Momentum app. Further, Momentum users have the potential to repay a 20-year loan in just 17 years, in addition to saving 8 percent on interest.
Fifth Third’s student loan app is not just reserved for the student borrower. Parents, close relatives, and friends that bank with Fifth Third have the ability to make round-up payment contributions to the borrower’s student loan balance.
In terms of the over 30 student loan companies working with Fifth Third Bank, there is a mix of both private and public student loan companies. The app can be found in the app store for any Apple or Android smartphone. The Cincinnati-base bank does not yet offer their own private student loan product.
As the U.S. continues to take on more and more student loan debt, the Fifth Third Momentum app is certainly a step in the right direction. According to The Student Loan Report, the national student loan debt is currently at $1.41 trillion. Further, there are over 44 million student loan borrowers in the country, or roughly 70 percent of all college students. Also, the average student loan borrower holds $27,857 in educational debt.
Image Copyright © Ken Lund