A financial technology company that aims to help consumers automate and accelerate their loan payments is coming out of a private beta test while already managing more than $1 billion on its platform.
For a $9.95 monthly fee, EarnUp is now available to consumers as a mobile app to manage and pay off loans. Mortgages, auto loans, student loans and personal loans are all currently included in the platform, and credit card payments are expected to be added soon.
“I am exceptionally excited and humbled by the demand for the product both from consumers and lenders who are interested in telling their members about the product as another option,” said cofounder Matthew Cooper.
EarnUp works by taking a little bit out of each paycheck in order to help users better manage their budgets. Subscribers can manage and pay loans through the app, which warns them if there is the potential for delinquency. The service also uses incentives like round-ups to encourage consumers to accelerate payments. EarnUp’s founders worked with Duke University behavioral economics professor Dr. Dan Ariely and the Common Cents Lab to improve the product.
The company would not disclose specifics about its user base, but representatives said said it was in the "tens of thousands" range.
In an internal study, 30 percent of EarnUp users reported that they missed fewer loan payments since they started using the app, and 80 percent said that EarnUp was the first time they had automated their finances.
Credit unions have long preached the benefits of teaching members better financial behaviors, and the movement prides itself on the financial education it provides to consumers. EarnUp, which is currently looking for credit union partners, represents the latest fintech in the marketplace that removes the credit union from the equation when it comes to money management.
Along with Nadim Homsany, Cooper founded EarnUp in early 2015 because the pair didn’t want to see consumers miss their loan payments. Homsany said he believes the lending space is rigged against consumers who don’t fully understand financial institutions and cannot stick to a budget. One example of this, he said, is when FIs misallocate extra payments on loans.
“At first I was really upset, I thought it was complete malice,” Homsany said. “What it really is, is incompetence and just terrible information technology systems.”
Since the majority of the American public lives paycheck to paycheck, delinquency can have a profound effect on a consumer’s life. Homsany said “societal cynicism” is what ultimately causes many lenders to assume consumers who miss loan payments do so because they can’t afford them, but he believes those delinquencies are more often because many FIs’ products are too complex.
“We’ve been working on this for several years now,” Homsany said, adding a mantra that will sound familiar to most in the credit union world. “We’re a mission-driven company. We believe you can make money and do social good at the same time.”