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
This feature 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 apps that help you get out of debt automate the process. Oportun analyzes your checking accounts and makes withdrawals that you can afford to assign to the financial goals you've set. Using the You Need a Budget integration with Undebt.it means your credit card balances and payments will stay up to date automatically. You won't have to enter them manually in your Undebt.it account each month.
Technology does the heavy lifting
Forget about doing a budget spreadsheet by hand. Many apps can sync to your accounts, analyze your spending, and keep you informed.
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. These apps can also 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 lead to big benefits.
Save money
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. Having 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
Follow these steps to find the best debt payoff app for your unique situation.
Step 1: Evaluate your priorities
To pick the best app for paying off debt, consider what you need help with the most. After you answer that, you'll know which type of app to look for. Since debt payoff apps work differently, it's all about finding the one that matches your needs.
Step 2: Look for an app that has features that support your goals
- Are you looking for the fastest or cheapest path out of debt? A debt payoff app that lets you compare different payoff methods may be the best fit.
- Do you have trouble paying more than the minimum each month? You might want to combine your debt payoff strategy with a budgeting app (like You Need a Budget) or rounding-up app (like Chime).
- Would you like to take a hands-on approach? A payment planning app would work well as a guide and to figure out a repayment strategy.
- Would you like an app to manage all your accounts? Try an all-purpose money management app like Monarch Money. A good all-around personal finance app should let you set financial goals, like decreasing debt, and make suggestions to help you reach them. In addition to debt payoff, you get one handy place where you can see all your financial accounts.
Step 3: Read online reviews
Read customer reviews to find out about other people's experiences with the app. It's a great idea to read both positive and negative reviews to learn what people loved and didn't love.
Some apps can be glitchy. Some are too basic to be useful to everyone who tries it. Some have great features but only if you're willing to pay. These are all great factors to consider as you experiment to find an app that works for you.
Step 4: Choose an app that aligns with your budget
Pick an app that you can afford. Some debt payoff apps are free, but others require a subscription.
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.
