Can you spare a few coins to pay down your debts? Of course you can, and even better, there’s an app that does it for you. We’ll tell you about how you can pay off your student debt and #DoDebtDifferently with spare change in our Changed app review.
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These days “round up” apps are everywhere (Acorns, DollarBird, Digit). These apps automatically “round up” your transactions, and toss your change towards specific accounts or goals. They’re basically the modern version of the change jars my grandma used to use to save for vacations. Since many of us rarely use cash anymore, saving the change is difficult–unless you can do it virtually.
Since the idea became popular, apps have flooded the marketplace. They put your virtual spare change towards a savings account, an investing account, or paying down your credit card debts.
This app, as you might guess, “rounds up” your transactions and puts your digital spare change towards your loans.
How Do You Set Up a Changed Account?
When you first sign up for the Changed app, you’ll put in your personal information, of course. But then you’ll put in information on the student loan, or other loans, you want to pay off.
Once you’ve entered your loan information, Changed will require the same type of information you need to set up a bank account. This includes your phone number, birthdate, and address.
With this information, Changed opens an FDIC-insured account where your savings will go until it’s time to send them to your loan provider. We’ll talk more in a second about what happens with that bank account as you use Changed.
Finally, you’ll link the Changed account to your primary spending account. They use bank-level security encryption to keep your information safe. But they also have to observe your spending patterns to be able to work their magic. Changed doesn’t actually store your account numbers. It just has you log into your bank account through the app, similarly to Mint or other popular budgeting apps.
Bottom line: it can take a minute to set up a Changed account. If you’re going to do it, get all this information together beforehand to save yourself some headache!
How Does Changed Actually Work?
Once your account is set up, Changed starts monitoring your primary account transactions. It rounds up every transaction from the first day your bank account is linked. So if you buy a cup of coffee for $1.27, they’ll count $.73 as a round up. And then later that day you purchase some groceries for $35.57, Changed will count another $.43 towards your roundups.
But here’s something that might get a little confusing, Changed doesn’t actually transfer the rounded-up money until the balance reaches $5. So it might take a few days’ worth of spending, depending on how often you swipe your card, to see an associated withdrawal from your account.
Once you do reach that $5 limit, though, Changed will transfer the roundups–which can total anywhere from $5 to $10–to your linked Changed account. And the money will sit in that account for a bit, until the total is $100. Once you reach $100 in your Changed account, they’ll send the money to your student loan company.
Why The Minimum and Maximum Transfer Amounts?
Let’s be honest, transferring every roundup separately to your loan provider would be a pain in the neck. That’s why Changed has the $5 minimum for transfers from your spending account and the $100 minimum for transfers to your student loan servicer.
And they have a $10 maximum transfer from your account in case you go on a spending spree. As long as you’re keeping your account balance at a reasonable level, you won’t have to worry about Changed overdrawing your checking account.
Can Changed Make My Regular Student Loan Payments?
Because of the variability of your own spending, you don’t want to rely on Changed to make your regular student loan payments. In fact, it’ll tell your student loan servicer to put its payments toward your loan’s principal.
But this is a good thing. It means Changed helps you pay down the loan more quickly and pay less interest over time. So keep making your regular loan payments while you use Changed as the icing on the cake.
Don’t Forget the Dashboard
As someone who loves metrics and charts, all the new apps that have dashboards these days are really impressive. And Changed is no different. It offers a great dashboard that lets you see how much you’ve put towards your student loans, what your balances are, and how close your Changed account is to that $100 mark at the moment.
These dashboards can be helpful if you’re motivated by numbers to keep going. And they can give you a solid idea of where you’re at on your student loan repayment progress, as well.
What Changed Gets Right
There’s a lot to like about this fairly simple app, including;
It Only Costs $3 Per Month
Some of the other change rounding apps are a bit more expensive than this, or they charge more if you’re rounding up more transactions. This could be a drag in months when you’re spending more money. Changed’s $3 per month charge is reasonable for the service provided, and it’s predictable, which is great.
It Limits Transactions
I like that Changed keeps transactions somewhat limited and won’t draw more than $10 from your account. If you don’t regularly keep a large cushion in your spending account, that’s something to work towards. But just because you’re not there yet doesn’t mean you can’t use this helpful app to make some progress on paying down your student loans.
The Dashboards Are Great
Personally, I think the dashboards from Changed would be useful all on their own. They’re just great for tracking your debt progress. And they also give you a useful way to figure out how long it’ll take you to pay down your loans at the rate you’re currently going.
Some Potential Drawbacks
With all its good points, Changed isn’t for everyone. The app has some downsides, including:
It Makes Payments Infrequently
If you really want to focus on paying down your student loans quickly, Changed may not be the best route. Since it waits until it gets $100 before sending money to your student loan servicer, it could take several months before it sends any principal payments at all. If you had instead sent the money each month as a $20 surplus to your regular student loan payments, you’d be better off.
It Won’t Link with Credit Cards
Changed is great if your primary method of spending is your debit card linked to your checking account. But if you use credit cards to try to gain more points, you may be out of luck. The app currently doesn’t link with credit card accounts. So you’ll either have to change your spending patterns, or it’ll take you an even longer time to fill up your Changed account to the $100 minimum.
Changed May Not Work with All Bank Accounts
As banks try new methods of authentication, some have trouble hooking up to these types of third party apps. For instance, I currently bank with Huntington National Bank. I have to re-login to my checking account every time I load my budget on Mint. It’s kind of a pain, and it’s one I’d likely experience with Changed as well.
You may or may not experience this problem, depending on your bank’s security. But it’s something to keep in mind if you look forward to using an app like this.
Alternative: Acorns App
It Doesn’t Flex Your Roundup Options
Changed is one of the more limited round up apps in this way. Some apps let you put additional rules into place. For instance, with Qoins, you can transfer $1 to a savings account every time you shop at Starbucks. Changed doesn’t currently allow this type of rule-setting, so you’re stuck with the simple rounding up of your transactions.
Pros and Cons
Only $3 per month
It targets a long-term debt
It limits transactions to keep from overdrawing your account
Easy to use
Loan payments are inconsistent
Doesn't work with credit cards
May not work with all banks
No flexible roundup options
Stash My Cash
Stash My Cash is a new feature that allows Changed members to save for a goal such as a down payment, a rainy day fund, and more while still tackling their debt. Depending on their current financial goals - to save and/or pay down debt -members can split their savings from 0 to 100%. This gives people the ability to store extra cash so they can be in a better financial position when they’re ready to make their next financial goal or when unforeseen expenses arise.
Stash My Cash was built to continue Changed’s mission to help people take on less debt and become more financially prepared when it counts.
Who Is It Best For?
Changed is a great app if you have a bank account that will work well with the app. And it’s great if you want to make paying down debt something automatic that you don’t think about much.
Maybe you’re currently working on other financial priorities, such as paying off higher-interest debts. But you still want to work on your student loans, too. In that case, you can make a plan for paying off your credit card debts, but let Changed help you make incremental progress on your student loans. Then by the time you get to them in your debt payoff plan, you’ll be ready to knock them out quickly.
On the other hand, if you’re a frequent credit card spender or are just ready to heavily focus on paying off your student loans, you might be better off without Changed. Other apps, such as Qoins let you decide where your money goes and set additional spending rules. Or you can always manually save the change on your own transactions by transferring digital change to your savings account at the end of each week.
Also read: Best Round-Up, Automated Savings and Micro Savings Apps
The bottom line is that Changed is a solid app with a lot of potential. If you want to make paying down your student loan debt a little easier, check it out.