New app rounds up spare change to pay loans off
faster
Fifth Third Bank introduces the Fifth Third MomentumTM app to
help college graduates pay off student loans faster by automating
frequent micropayments toward the balance on student loan
accounts.
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Melissa Stevens, Fifth Third Bank's Chief
Digital Officer, helped create the Momentum app to offer an easy
solution for millennials struggling to pay college debt. (Photo:
Business Wire)
Fifth Third Bank customers with a Fifth Third debit card can
link student loans held by over thirty different servicers to the
app. Once the loan is connected, customers can choose to round
their debit card purchases up to the next dollar or add one dollar
to every purchase. Either way, the extra amount is applied to the
balance on the designated loan on a weekly basis once a minimum of
five dollars in round ups is achieved. They can download the app
and set it up through their smart phone.
Customers who choose to round up using Fifth Third Momentum can,
for example, apply 55 cents to their designated loan balance when
purchasing lunch for $9.45 for a total of $10. The same customer
who chooses the dollar pay-down would pay $10.45 for the same
lunch, with $1 of that being applied toward the student loan.
Student loan debt totaled $1.3 billion in 2016.1
“College debt affects our communities and our economy. This
isn’t just a millennial or student issue,” said Greg Carmichael,
president and CEO of Fifth Third Bancorp. “As a bank, we need to
bring innovative solutions to the market, to lead the way in
helping the next generation pay off their student loans faster.
Fifth Third Momentum is a simple digital tool to help pay these
debts faster.”
Fifth Third estimates that customers who round up $25 a month
using the Fifth Third Momentum app could pay off a 20-year loan
three years sooner and pay 8 percent less in total by avoiding
interest that would have accumulated.*
Family members can help, too
Student-loan debt affects more than the borrower. It has a
crippling effect on the economy and society at large. The burden of
student-loan debt is causing graduates to delay marriages2 and to
delay or reject first-time home purchases3. Student-loan payments
are also preventing many young workers from being able to start
saving for retirement4, contributing to a widening generational
wealth gap. It also affects families as more students5 plan to move
back in with their parents to save money after graduation to pay
off their debts
That’s why the Fifth Third Momentum app allows graduates’ family
members to use the app, too. They can sign up with their own Fifth
Third debit cards and connect their purchases to help their loved
ones pay down the student debt they owe.
Fifth Third invested a year to understand millennials' needs and
aspirations better, talking with hundreds of millennials and
surveying thousands. We talked with millennials in six markets
across the U.S. and three around the world.
We learned that, when it comes to banking, and specifically to
pay their student loans, millennials want a product that is
positive, approachable and celebrates their wins. They want it
available on an app, and they want it to make them feel better
while saving them money.
“We wanted to offer a solution that would help people pay off
their student loans faster and make them feel good while doing it,”
said Melissa Stevens, Fifth Third Bank’s chief digital officer. “We
aimed at creating an intuitive solution that was integrated into
their daily lives instead of something that would feel like they
needed to come to us.”
How to use Momentum
Fifth Third Momentum can be used with more than 30 major
student-loan servicers — public and private. Fifth Third Bank does
not offer student loans. Because the app is easy to set up and
doesn’t require much daily thought, the bank hopes the automated
micropayments platform will make reducing debt something as easy
and inexpensive day-to-day as buying a cup of coffee.
Fifth Third Momentum is available to any Fifth Third debit card
user. To get started, customers can download the Android or Apple
app and enter the name of the institution servicing the student
loan. The app gives tips to help locate the loan number. Customers
then decide on their preferences — whether to round up purchases or
contribute $1 for every debit-card transaction. Once $5 in payments
is accumulated, the money is automatically sent to the student-loan
account at the end of the week. To keep our customers motivated,
they earn badges, called #Wins, for continuing to stick with this
new habit.
About Fifth Third
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of June 30, 2017, the Company
had $141 billion in assets and operated 1,157 full-service Banking
Centers and 2,461 ATMs in Ohio, Kentucky, Indiana, Michigan,
Illinois, Florida, Tennessee, West Virginia, Georgia and North
Carolina. Fifth Third operates four main businesses: Commercial
Banking, Branch Banking, Consumer Lending, and Wealth & Asset
Management. Fifth Third is among the largest money managers in the
Midwest and, as of June 30, 2017, had $330 billion in assets under
care, of which it managed $34 billion for individuals, corporations
and not-for-profit organizations through its Trust and Registered
Investment Advisory businesses. Investor information and press
releases can be viewed at www.53.com. Fifth Third’s common stock is
traded on the Nasdaq® Global Select Market under the symbol “FITB.”
Fifth Third Bank was established in 1858. Member FDIC, Equal
Housing Lender.
SOURCES:1- Press Briefing on Household Debt, with Focus on
Student Debt, Federal Reserve Bank of New York2- Marriage,
Millennials, and Massive Student Loan Debt, Concordia Law Review3-
Student Loan Debt and Housing Report 2016, National Association of
Realtors® and Salt®4- Half of American families with student loan
debt delay saving for retirement, Journal of Accountancy5- Young
Money Survey, TD Ameritrade*Example is based on a loan amount of
$37,172.00 with a fixed interest rate of 6.80%.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170905005810/en/
Fifth Third BankLaura Trujillo,
513-534-4361laura.trujillo@53.com
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