Looking for the latest technology to help you eliminate student loan debt? Nothing can replace the motivation of a Student Loan Repayment Movement, but sometimes a technological assist can help you move in the right direction.
Chipper is the newest student loan repayment app. In fact, it’s so new, that right now it’s in beta testing. Users have to gain access through an early access option. Like so many other apps, Chipper promises to help you pay off debt faster.
Will it deliver? Here’s what we found.
- Round up app that applies round up savings to your student loans
- $2 per month fee to use
- Can help motivate to pay off debt faster
What Is The Chipper App?
The Chipper App is a “round up” app that automatically rounds up credit and debit card purchases to the nearest dollar. Roundups are held in an account. At the end of the month, the money in the account is applied to your student loan.
The total cost for this technology is $2 per month (which is on par with similar debt payoff apps).
Will Chipper Make A Dent In My Student Loans?
According to Chipper, users of the app will save $6,200 on their loans over 4 years. Based on an interest rate of 6.25%, that would mean users would need to direct an extra $100 per month towards their debt. Can Chipper actually direct $100 towards student debt each month?
To test out how effective the Chipper app is, I decided to use the logic to determine how much Chipper would put towards my student loans over the past three months. Based on my personal spending habits, the app would direct an average of $30 per month towards debt (this is the net number after subtracting the $2 per month app fee).
Putting an extra $30 per month towards debt will help you pay off debt faster. That said, setting aside an extra $7 per week accomplishes the same goal. Is it psychologically that much easier to have the money coming from roundups as opposed to an automated transfer? Only you can decide that for yourself.
Chipper is an accurate name for this app. You’ll chip away at student loans. During certain phases of your debt payoff journey, chipping away at debt is a fine approach.
For example, if you’re nearing the end of your debt payoff, but you’re more excited to use your funds to invest, start a business or make big life changes, a “chip away” strategy makes sense. On the other hand, if paying off debt is your top financial priority, then you need tools that will help you make double and triple monthly payments. For that, you need more than the Chipper App.
What Alternatives Are There?
The space to pay off student loan debt is growing right along with the amount of student loan debt in the United States. Chipper is just the latest addition to the party.
The only other major app that’s using the “round up” concept to direct savings to debt is The Cents App. The Cents App also costs $2 per month, so it delivers an almost identical product. However, the Cents app connects to every type of debt product (student loans, mortgages, credit cards), while Chipper focuses on student loan debt.
PickPocket.Me is another student loan payoff app, but this one emphasizes bigger savings. For every dollar you spend, PickPocket.Me sets aside 10 cents (Or 5-20% depending on the setting you choose) to put towards your loans. If you spend $3,200 per month, PickPocket.Me will put an extra $320 towards your student loans. Even better, PickPocket.Me is free. Personally, I like the PickPocket.Me approach more than most other options. It offers an easy psychological trick, but it helps you make real progress.
Alternatively, you could set money aside in a Rize Money savings account which is an easy way to automate savings. Rize is built on a “donations” model, so it’s technically free, though most users pay $2 per month to use the platform. You can use the money in your Rize account to payoff debt.
The last app that you might want to consider is “Tip Yourself” which allows you to set money from one savings account to another based on actions you choose. For example, you might tip yourself $5 when you forgo a cup of coffee in the afternoon, or you might tip yourself $3 when you remember to use a coupon. Once you have a few hundred bucks saved in your “Tip yourself” account, you can make a big payment on your debt. Tip Yourself landed on our list of the 8 Best Automatic Savings Apps.
The Final Take
Compared with other debt payoff apps, I don’t love the Chipper app. The value it delivers is too small compared with its $2 per month price tag. Most people with student debt need to focus on creating big wins for debt payoff. Chipping away at debt simply won’t do for the majority.
If you happen to be in the final stages of debt payoff, and you’re more motivated to use money for investing than for paying off debt, the Chipper app could be a decent app. It’ll keep you paying a bit more without causing much pain. Outside of that scenario, I can’t see a real reason to use the Chipper App.