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This app wants to take the pain out of paying off student loans

Digit app
(Image credit: Digit)

Even the very best student loans come at a cost, with some 43 million American graduates wrestling with debt balances that can take decades to clear.

Automated savings app Digit has introduced a new feature designed to help college grads pay off these loans faster and with less effort.

Digit uses artificial intelligence (AI) to analyze a user's income compared to their spending habits, and then identifies an optimal amount that can safely be squirreled away.

Previously, the service was capable of putting these savings towards things like credit card payments and rainy day funds. Now, it can send that money straight to student loan providers as well.

Take back control without trying

Typically, students taking out loans to fund their education agree to make a minimum monthly payment to the provider once they enter gainful employment.

If our own experience is anything to go by, it's easy for graduates to forget about the loan thereafter, so long as they're able to stay on top of these charges – even if opportunities to accelerate paying off the debt arise.

As such, a typical arrangement might see a graduate with around $20,000 worth of debt taking 21 years to pay it off.

Digit hopes that by automating the process, people are able to clear their debt faster – which is no bad thing, as the Federal Reserve Bank of New York estimates that there is up to $1 trillion worth of unpaid student debt in the US.

You can check out Digit for yourself here – signing up is relatively straightforward, after which you simply link your checking account and start setting savings or payment goals.

Companion apps are available for Android and iOS devices.

Alternatively, our guide to the best debt settlement companies explains a number of options if you want to simplify all your repayments into a single monthly charge.

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