Putting extra change in a jar can accumulate into some real savings surprisingly fast.
But then you have to wrap all those coins, bring them to the bank and cash them in.
Banks must have been paying attention.
Many have recently started providing a way for customers to round up transactions in their bank account or credit card and apply to them to a savings account. A new spin on the change jar.
ChangEd takes this concept even further by applying unused change to your student loans. By using the ChangEd app, it rounds up each transaction to the nearest dollar and applies the difference to your student loans once $100 is reached.
In this article, we’ll do a review of the ChangEd app.
The Idea Behind ChangEd
ChangEd’s mission is to save you thousands in student loan interest and cut years off your loan. All this simply by rounding up your transactions and putting the difference into a ChangEd account that eventually gets sent as a student loan payment.
To give you an idea of how much interest you can save, we’ll use an example from the ChangEd website:
On the above loan, that’s $66,000 total that you’ll pay on the loan with principal and interest factored in.
Using ChangEd, you can cut five years off the loan and save $10,000.
ChangEd is the brainchild of two brothers - Nick Sky and Dan Stelmach. The idea was hatched when Dan became discouraged with the interest and payments on his student loans and thought to himself, “Man, something needs to change. Boom!
Change — spare change. What if I rounded up the spare change from my transactions and sent that to my student loans?”
Dan brought the idea to his brother, Nick. Nick said, "I thought it had a lot of potential. A lot of people are struggling. I have student loans. All of my friends have student loans. It's something I felt would be impactful to a huge market.”
From those conversations, ChangEd was born.
The ChangEd App
The ChangEd app is the key to making the entire process work. Currently, the app is available only for iPhone. An Android version is in the works. You can enter your email here to get a notification once the Android version is available.
The first step in signing up for a ChangEd account is to download the app from the Apple App Store. Then follow these steps in the app to create your account:
- Enter your email and choose a password
- Enter your student loan info
- Enter your personal info
- Link your spending account
- You’re done!
The app is secure. Your bank account login info isn’t stored within ChangEd.
After you have completed setting up your ChangEd account, the app will start analyzing your spending. As an example, when you spend $2.54 for coffee, the app will save $0.46. Once you get to $5 in savings, it will send the money to your ChangEd FDIC insured account.
Once your ChangEd account reaches $100, the money will be sent to your student loan account as a payment.
ChangEd does charge a $1.00 per month fee.
Tracking Your Progress
One of the best parts about using ChangEd is the ability to see your progress. The app does a great job of this. As your extra change is applied to your student loans, the app displays the number of years and interest you’ve cut off your loans.
You can also see all of your transactions and the rounded up amounts within the app.
Below are several screenshots of the app interface showing transactions on the left and impact to loans on the right.
Is ChangEd For Everyone?
ChangEd is a novel take on the saving through spare change. If you have difficulty sending extra payments to your student loans or do it inconsistently, ChangEd can certainly make a difference. The app automates the entire process, so you never have to think about it.
However, if you do make consistent extra payments, you are likely doing a better job than ChangEd. ChangEd will only send a payment when your savings hit $100. Depending on how many transactions you have within a month, you might not hit $100 for a few months.
If you could instead send smaller payments such a $20 or $30 at a time, it would have more of an impact on interest than waiting to send $100.
Also, the app will link to your bank checking account. That means you’ll have to use a debit card. You can link to a credit card but it will need to be with the same bank. If this is a credit card you use infrequently, it will take even longer to accumulate the $100 loan payment trigger amount.
ChangEd can certainly help with shaving off time and interest on student loans. How much time and interest depends on how many transactions someone has within each month.
For those of us who have a difficult time making extra payments on our student loans, the automatic payments of ChangEd is a welcome feature.
Do you have trouble finding the money in your budget to make extra student loan payments?