Pillar Review: Can This Student Loan App Help You Pay Off Your Debt?
Only with your smartphone can you earn a little more money, file your taxes and – yes – even refinance your student loans. Indeed with the app pillar, you can also organize and repay these school loans ahead of time.
Debt settlement mobile apps have been around for years, but Pillar stands out for its promise to reduce your credit balances, including analyzing your income and spending patterns. The free app claims to cut their average customer’s payback by $ 6,200 and four years.
“Pillar is great for people transitioning from one stage of life to the next,” CEO Michael Bloch told Student Loan Hero. “For example, if you get a raise or work overtime, Pillar can help you figure out what to do with the extra money.”
Specifically, we deal with:
Pillar Student Loan App Review: The Basics
The app is available on iOS or Android devices, but be aware that Pillar is not a student loan company – it doesn’t and doesn’t lend money refinance your loans.
Instead, it is designed to help you pay off your debts by giving you the ability to organize, track, and repay your loans in one place.
You would combine your federal and personal loans by searching for your lender in the app. You can also link your bank accounts to activate Pillar’s advisory function.
From there, notifications would arrive outlining smart steps you can take with your debt. For example, you may be advised to make an additional payment in a month when your expenses are low.
Pros and Cons of Using Pillar
“My wife graduated from law school with over $ 300,000 in debt,” wrote Bloch when he announced the construction of Pillar on the company’s website. “Shortly after she graduated, I started at Stanford Business School, where I wanted to take out an additional $ 250,000 in student loans. We spent weeks researching how we could repay these loans. “
Unfulfilled by the available solutions, Bloch founded Pillar. Here’s what we like about his company’s advancements so far, as well as a few other facets that may still require some work.
Pro: Optimize your monthly payment
For student loan borrowers who feel too overwhelmed to budget the loan payments, Pillar suggests the idea that small steps eventually lead to significant profits. It even looks for tiny amounts of savings in low spending months and urges you to redirect those funds to your outstanding loan balance.
Our co-payment calculator shows that every little bit helps. For example, if you pay $ 100 per month for a $ 10,000 balance that is paid back at 7.00% interest, but file the $ 200 off your birthday check, you could cut your repayment by five months.
Pillar would do this budgeting for you and then encourage you to take action.
Downside: You may have to wait in line
If Pillar lifts off the ground, you might be standing in line. During the fine-tuning process, the app picks up users in the order they downloaded them and completed their profile, creating a long waiting list. (When I signed up in August 2019, I was placed in 9,145th place.)
However, once you are removed from the waiting list, you should be able to connect your Bundeskredit-Servicer account without any problems. I was able to locate all but one of the education ministry’s nine loan service providers (only OSLA Servicing is apparently missing).
Pillar’s roster is also missing some notable private lenders. Private student loan companies like College Ave, Earnest, Citizens Bank, PNC, and SunTrust were nowhere to be found.
Disadvantage: Not all borrowers are best served by the app
While Bloch would like every Student Loan borrower to download Pillar, it may not be as useful for all types of borrowers – at least at the current stage of development of the app.
For example, if you have an income-based repayment plan or are applying for a student loan, it may not make sense to change your monthly payment.
In August 2019, the company announced that it is still developing tools for borrowers looking to cut their monthly fees or pursue forgiveness programs. (It also suggested charging a small fee for future use of its services.)
Even if you’re the type of borrower well-suited for the app right now, be aware that Pillar doesn’t actually allow you to make a single monthly payment – Pillar itself suggests that you still get your monthly payment straight to yours Credit service providers provide. so you don’t lose interest rate cuts when you sign up for automatic payment.
After all, there is no creditworthiness component of the app, so there is no way for Pillar to determine your eligibility for student loan refinancing – a move that could consolidate your debt and lower your interest rate.
Cons: Automated “advice” for student loans is not always smart
If you loathe your federal loan company or have had a fight with your private lender, you may need objective advice on student loans.
Pillar says it is impartial in its advice because it will not make money if you fail to make the repayment like some lenders do.
“Pillar users are looking for someone to take care of the paperwork behind the scenes,” says Bloch. “You want to be presented with relevant options so that you can make smart decisions yourself.”
Although the advice-generating part of the app is done through machine learning, human judgment plays a key role, Bloch said.
“We worked with various student loan experts and financial advisors to develop our recommendation engine,” said Bloch. “By analyzing people’s individual financial situation, we are able to give individual recommendations that we believe are best suited for each individual.”
However, this automated nature of the app can come with less flexibility than you’d like. For example, Pillar takes your leftover cash and applies it to your loan balances using the debt avalanche method. If you prefer to go into debt on your student loans, the app may not be for you.
Or at least for now. That could change, as Bloch said, “Pillar will offer the snowball method as an option in the near future.”
Should You Use Pillar to Manage Your Student Loans?
While Pillar is still in its infancy, Pillar has attracted a lot of attention – plus $ 5.5 million in funding – and for good reason. It has the noble goal of helping student loan borrowers end their debts early.
In its current form, however, the mobile app is not a must. To date, it still has to address some of the most common repayment issues, including the hunt for lower monthly fees or long-term forgiveness.
More successfully, however, it has helped borrowers with change make additional loan payments and thus lower interest rates. But Pillar isn’t your only option when it comes to this feature because you could also …
- Make additional monthly payments yourself with a Budget for beginners
- Track your loan repayment with other tools like My credit tree (Note: LendingTree is the parent company of Student Loan Hero.)
- Redirect monthly savings towards your debt through alternative finance apps like Qoins
On the other hand, Pillar is easy to use and could be exactly the nudge you need to optimize your student loan repayment. In fact, the company plans to offer a similar service to borrowers with credit card and other debts at some point.
Even if you do decide to wait for the latest addition to the app, there are other strategies you should pursue to repay your student loan debt as well.