I love FinTech, and I’m always looking for the latest personal finance applications that will help me achieve my financial goals. A few months ago, I had an idea about linking the principle of Acorns and penny rounding transactions with attacking personal debt. I thought that if I wanted this, others out there probably did, too.

Well, it turns out that the team at Qoins was one step ahead of me. They had just recently turned this great idea into a reality, and I’m happy they did.

A Wiser Version of Acorns?

Qoins operates on a similar principle to Acorns. (If you haven’t yet checked out our review of Acorns, you can do so here.) In a nutshell, though (see what I did there?): Acorns is a penny rounding app that monitors your spending activity. It rounds up the transactions that post to your account, then tracks the round up quantities in a queue until they reach a threshold.

Once you have enough change in the queue, Acorns applies that balance to purchase low-cost exchange-traded funds (ETFs) on your behalf, in a separate brokerage account. Over time, you’ll build up an investment portfolio with minimal effort.

Penny Rounding with a Twist

Instead of investing your spare change, Qoins wants to help you eliminate your debt. Their promise is to help users save money by paying down debt, like a debt snowball. The less time you hold debt, the less interest you’ll pay. So, Qoins wants to speed up the process for you.

Like Acorns, they charge a small fee for their service. The fee covers checks mailed to your loan accounts, holding your deposits in a separate FDIC-insured bank account, and operations overhead. We’ll review the fee structure later in this article.

How it All Began

I decided to investigate the app further. I wanted to learn how it works, and decide if it’s really a useful tool in my mission to become financially free. As part of my research, I spoke with Christian Zimmerman, co-founder and CEO of Qoins. The first thing I asked Christian was how he got the idea and where the rubber met the road.

As a recent Georgia State University business school graduate and FinTech evangelist, Christian came up with the idea while using the Digit app to (as the app says) “Save money, without thinking about it.” Since tackling personal debt is a struggle for many Americans, why not use spare change to instead pay down debt, bit by bit?

From there, it was a matter of finding an app developer (co-founder and CTO Nate Washington) and getting their business model up and running. The rest is history, and they’ve been live as a service since September 2016.

Where to Find Qoins

Qoins is available on iOS and Google Play for Android devices.

Who Can Use Qoins

Anyone with a U.S. checking account aged 18 or over can use Qoins. You’ll need both your account and routing numbers in order to sign up and get the app running.

Getting Started

There are three steps to getting started: link your bank account, link a round up account, and set a payment rule.

Account setup is straightforward. To link a funding account, provide your checking account and routing number. Within a few business days, Qoins will deposit two small amounts (pennies) into your account. After you confirm the two deposits from Qoins, you’re ready to get rolling on attacking your debt.

It took 3 business days for my account verification, most likely because I started the process right before a federal holiday. I logged into my bank account, noted the two small deposits, and input their amounts into Qoins.

Operating Principles

Qoins lets you link credit cards and checking accounts (including debit cards) to the app to scan for penny rounding transactions. I linked a credit card and a checking account to get the ball rolling.

Resource: The Best Checking Account Promotions Available Right Now

For each day with a transaction, Qoins will round up your purchases to the next whole dollar. That extra amount is earmarked for payment toward your debt.

When your money gets withdrawn depends on what you’ve defined as your payment rules. Once you meet the predefined threshold, Qoins withdraws the money. They will then store it in an account while they process your payment check.

Withdrawal and Payment Rules

I can choose between two payment rules for my debt pay-down plan. This equates to either mailing a debt payment check once a month or mailing a check each time I reach a preset threshold. This could mean I mail out between 1 and 10 checks per month, depending on how active I am with my linked, round up accounts.

Rule 1: This first payment rule is a once-a-month withdrawal, which occurs on a date of my choosing. I personally chose the 28th of each month. Each time my round ups equal $5, Qoins withdraws the money and stores it in a separate account on my behalf. When the 28th rolls around, whatever amount I’ve saved up–usually around $40–goes out in the form of a check directly to my creditor. This is what I call the lump-sum rule.

While using this once-a-month rule, I’ve had three successful payments go out so far, with zero issues. No returned checks, and the balance was applied to my loan principal.

Rule 2: This one is a frequent payments option. I will send payments in $10 increments, as often as I reach this threshold. With my linked accounts, Qoins will round up those daily transactions each day until I hit the $10 threshold. Then, a check will be sent.

I can theoretically mail out any amount of checks required to support my daily round up activity each month. I call this–you guessed it–the threshold rule.

Fee Structures

Qoins’ fees and payment frequency are directly related to one another. Let’s examine how much I’ll pay with each withdrawal and payment rule.

The lump sum (or once monthly) rule costs a flat rate of $1.99 per month, no matter how many transactions I post. As long as I accumulate $10 or more in total round ups, Qoins will mail a payment on my behalf. No matter how much I accumulate in the Qoins account, though, the check will mail only on the date I specified upon initial setup.

The chart below shows projected expense ratios for the lump sum model.

Lump Sum Cost Modeling      
Round Ups $10 $50 $75
Monthly Fee (one time) $1.99 $1.99 $1.99
Expense Ratio 19.9% 3.9% 2.65%

The threshold (or frequent payment) rule withdraws money from your checking account once your roundups hit the $10 threshold. Qoins will mail a payment check to your creditor any time you meet this threshold, meaning up to several times per month. The service costs $0.75 a month, plus $0.05 cents for every dollar paid out.

The cost model below assumes one, five, and nine withdrawals per month, though yours may vary.

Threshold Cost Modeling      
Round Ups $10 $50 $90
Monthly Fees (One time .75 + .05 per dollar) $1.25 $3.25 $5.25
Expense Ratio 12.5% 6.5%  

The results show the lump sum payment option is better than the threshold option. If I pay $50 towards my debt with the lump-sum model, I’ll pay 3.9% versus 6.5% with the frequent payment model. As far as my debts, there should be little-to-no difference in the lifetime interest paid, whether Qoins is sending one check per month on my behalf, or ten. So, I will continue to use the lump sum payment plan.

What Kind of Debt Can I Pay Down?

When I created my payment rule, I entered my basic loan information: payment address and account number. Qoins does have a database of remittance addresses for different loan providers, so you may only need your account number to finish setting up your payment rules. That’s just the app doing its part to save you time.

I use Qoins to pay down a loan from a major U.S. bank– their credit card payment address is listed, but my specific loan payment PO Box wasn’t listed. Oh, well. I used my last loan account statement to find a mailing address and full account number, so Qoins could send the money to the right location. If you’re paperless, those can be accessed through your account website. This was the last bit of information required to set up my debt paydown plan with Qoins.

All of these actions were done in the payment rules tab, which is the first thing you see when you open your Qoins app.

Track your Payment History

The Qoins app gives me the option to track every transaction that has been made on my behalf. The Account Activity tab allows me to view each rounding transaction, sorted by day. For example: picking a random day, January 15, I can see that Qoins applied $2.31 to my debt pay-off plan.

The Payment tab tracks each individual check mailed out by Qoins on my behalf. I can see what date it was sent, the address, and the associated debt account number. This is a great way for me to track my Qoins activity and verify that the money is being applied to my principal balance.

Checking my loan account balance revealed it took eight calendar days from the time my check was mailed to the time it was applied to my principal. Qoins’ rule of thumb is 7-10 business days for payment processing by a lender.

My Profile

My profile page provides a quick summary of my debt destruction, showing my all-time debt pay-off amount and the total paid during the last 30 days.

I can add or edit my funding source here, by modifying my checking account and routing number. If I ever need to disconnect my checking account, I can also do it here.

The Help Center is a list of frequently asked questions (FAQ), and I can use this subsection to send the Qoins team a direct message.

The Free Credit Tools section provides a free credit score from CreditSesame. They advertise no payment required, ever!

Tip: Credit Karma offers a free credit monitoring service that makes it easy to access your scores and credit reports at any time.

Resource: How to Get Your Totally Free (and Legit) Credit Score

I can also explore refinancing or consolidating a personal loan with SoFi in this section. You’ll get a direct link to the SoFi student loan or personal loan page, depending on which option you choose.

Security and FDIC Insurance

Qoins uses 256-bit encryption to secure your data, and your money is held in an FDIC-insured account while it’s awaiting transfer. They don’t store your bank login information, and their security technology meets industry standards.

Personal Progress Report and Returned Checks

Since joining Qoins three months ago, I’ve paid down over $100 in debt, and I expect to pay off over $1,000 after a full 12 months. The best part? I didn’t even notice the extra money coming out of the account. Debt freedom here I come!

Because they don’t currently offer wire payments to creditors, I asked Christian if customers ever had debt payment checks returned. He told me very few users have had their payments kicked back. Usually, if a Qoins debt payment doesn’t make its way to the customer’s debt account balance, there was an error in the account number or mailing address. Those checks are returned so Qoins, and the customer can correct the issue.

This was my biggest concern going into this app’s experiment. Would the check get cashed? Applied to the right account? Turns out, I had nothing to worry about since, I’m batting three for three in mailing debt paydown checks through Qoins.

Global Progress Report

I asked Christian for an update on how many people are using Qoins to pay down their debt and how much they’ve paid. He gave me some great stats about their army of debt defeaters: In the six months they’ve been live, 1,200+ users have paid off over $30,000 in debt. They’ve seen a drop-off rate at about 5% of users, meaning only 1 out of every 20 people who use the app decide they don’t like it and move on.

Qoins is fulfilling its mission of helping users save money by paying debt down early. From a small startup working with only 12 banks, this successful debt elimination app now partners with over 10,000 banks. This is one of the first mobile applications to allow users to automatically round up change, pay off debt, and, in turn, live a better financial life.

Pros and Cons

  • Easy to use

  • Customer service available via app

  • Two debt payment options to choose from

  • $1.99 fee can be high if you’re only transferring out $10/month

  • Takes a few days to verify your account

My Recommendation

Qoins is the penny rounding app I’ve always wanted. While other rounding apps allow users to save money for a rainy day, Qoins allows me to attack my debt, speeding my progress on the road to financial independence. I am automatically building debt elimination into my daily routine. Using the one-payment-a-month, the lump-sum option is worth the $24 a year to move me toward my goal of debt freedom.