Pay off your student loan early with less interest — that’s the idea behind the ChangEd mobile app, which is partnering with Miramar-based Tropical Financial Credit Union to provide the student-loan payment service free to customers with checking accounts.
Young people burdened by student loans could save $10,000 in interest on $37,000 in a 25-year loan by paying an extra $50 a month in “spare” change toward the loan, according to ChangEd, a Chicago-based startup that won an investment from Mark Cuban on ABC-TV’s “Shark Tank.”
“You can save 30 percent,” said Nick Sky, who co-founded ChangEd along with his brother, Dan Stelmach.
A $37,000 loan would cost more than $60,000 by making only the minimum payments and paying full interest, for example.
Here’s how the service works: ChangEd app members link their debit and credit cards to the app, and every time they make a purchase, the amount is rounded up to the nearest dollar. If a ChangEd user buys a tall-sized Salted Caramel Mocha Frappuccino at Starbucks for $4.25, an additional 75 cents is deposited in a special FDIC-insured account earmarked for student loan payments.