Ways In Which Startups Are Trying To Fix The Consumer Debt Well


It is not hard to state that consumer debt remains one of the major challenges faced by the American economy. The average household comprises $132,086 in the debt form and the interest payments represent around 9% of average household income. A consumer debt has already skyrocketed at recent times mainly because of the risk in the cost of living has outpaced income growth over the past 12 years. Even while the median household income has grown 26% since 2003, household expenses have already outpaced income growth at a significant manner with the medical costs growing by 51% and food and beverage prices increased by around 37% in same time.

Whenever you get to dissect the consumer debt, even more, you will realize some of the sad realities. Medical bills happen to be the number one reason behind bankruptcy in America with 63% of them doesn’t have enough savings for covering an emergency of $500. Now, with the sizable and tough problem comes an opportunity for the investors and tech companies for building solutions in addressing them. There are some startups, which can help Americans to just get rid of debt.

Going for the mortgage SoFi:

Mortgages are often known as the highest consumer debt category at staggering $8.25 trillion. SoFi mainly stated its business with the space dealing with student loan only and with a very simple premise.

  • Even the educational background is well correlated with creditworthiness with passing time.  They have not just become the leader in this field of mortgage space but leverage the wealth of consumer data, as available nowadays for improving underwriting accuracy and even lowering the total borrowing costs.
  • In addition to their ability for offering better rates, they are able to offer you with the added credit options for qualifying buyers by just offering mortgages to around $3 million for as little as the 10% down without even going for the private mortgage interest. It has been a huge cost to the borrowers, who cannot actually come up with the current 20% down payment.

Going for the medical bills under Remedy:

It is really tough for you to know more about the medical bills related remedy. Therefore, it is mandatory that you get in touch with the ways to learn the reviews and handle services with ease. As it has already been mentioned, the medical bill is at number one position behind bankruptcy in America. As the healthcare costs have increased by around 51% right from 2003, patients are likely to pay a sum of $120 billion every year as a result of medical billing errors and some overcharges.

  • The reality around here is that patients are bearing brunt of broken medical bill industry disproportionately. At this time, you have Remedy, which has developed proprietary technology, which combines a powerful form of error detection algorithms with the network of the medical billing specialists for eliminating some unnecessary overcharges and medical errors.
  • As a promising result, this source is able to identify errors and overcharges by around 70% of bills that it reviews. It helps in saving a sum of around $1000 per year for an average American family on medical bills.
  • This source will actually go through the last 12 months of your claims and will correct any kind of inaccuracies, provides automatic reimbursements for HSAs and FSAs and reviews prescriptions as well.

Now for the credit card debt:

Some results have proven that an average household will have a whopping of around $16000 in the credit card debt. Despite the recent falls from fame in public markets, the innovations which some companies are able to bring up to consumer lending market have been revolutionary.

  • Those days are long gone of lower than 30% APR loans from banks to be the only option left. Even the opacity around underwriting procedure and the fees have taken a back seat now.
  • The reputed lending companies are able to offer you with personal loans, depending on the individual person and the future earning potentials, which are factors just beyond credit scores like hobbies and education. It further helps in lowering the interest rate by an average of around 32%.

Going for the student loans:

You have another startup company Earnest, which is here to help you with the student loans. Student loan debt is currently at $1.3 trillion, which is also the second highest in the consumer debt category. The average student will leave college with a hefty worth of student loan or around $25000 and will end up having to service these loans until they are well into the current thirties.

  • Earnest will help students to refinance and then consolidate loans and importantly, figure out the monthly payment plan that will grow in tandem with career trajectory.
  • To this date, Earnest is able to save clients with an average of around $18000. If that wasn’t enough, credit scores are not even taken into any kind of considerations for covering the underwriting procedure.

Managing consumer debt and spending from AI:

Mint was a reliable start-up venture for laying the foundation here and also acting as consumer’s spending advisor. But, it is highly predicted that the next wave of the startups will take around a step more for helping consumers to just stay on track for managing debt obligations and scaling back lifestyle for avoid getting right into any form of tough financial scenario.

  • One such promising startup to get into has to be Trim. It is currently helping out consumers to analyze some of the unwanted subscriptions on credit card based bills.
  • This might be able to extend to help the consumers scale back on some of the bigger spending buckets or just finding the cheaper form of capital sources for the current debt.

Always be sure to give startups some chances as they are coming up with new ideas all the time and including the same with the aim to help you save some bucks. Just give them one chance and they won’t disappoint you in any way possible for sure.


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Marina Thomas

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