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How much are you overpaying banks? Find out from an independent debt expert

 blog

 2 minute read

Published: Mon Aug 26 2024

By Kathryn Dutile

Have student loans? A mortgage? Credit card debt? The vast majority of Americans are overpaying on their debts without an independent debt expert. Collectively, we are overpaying expensive banks and non-bank lenders by more than $100 billion a year! This comes from not shopping around all the lenders and prices available, using higher priced ways to borrower, and not switching or refinancing debts when pricing improves.

The financial system was created with unnecessary complications. Most Americans overpay on their debts by over $1,000 a year because they aren’t getting unbiased advice from an independent debt expert on the best ways to borrow. Here are a few ways the financial system takes advantage of us:

1: Advertising dictates how we find information Google may be free, but paid advertising dictates how easily information is found. A premium is paid on every search term. Even sites that offer price comparisons are paid by banks and lenders to show their products and in which order.

A great example is NerdWallet, where every lender pays obscene amounts to have their products listed. Therefore, if you search for "best loan rates, " you see the lender(s) willing to spend the most on advertising.

2: The information we get is confusing Financial terminology is overly complex. Lenders using plain English rather than terms like "principal" or "APR" would remove unnecessary boundaries; however, lenders are incentivized to make money.

Without an independent expert in your corner, if you don't understand prices, you might not be able to effectively search or negotiate for the lowest price loan you can get.

Most financial institutions show tables of various loan options; they will list all loan option variables, including loan term, monthly payment, and interest. However, most consumers don't know the most crucial variable to optimize for. Should I choose the lowest APR? If it’s a mortgage, should I lower my monthly mortgage payment or the amount of closing costs?

3: No online fiduciary for borrowing There are lots of sources for advice if you have money to invest. There are roboadvisors, tons of investment apps, and 401k providers you get through work. However, there is no easy independent debt expert. 40% of people turn to Google for debt advice, yet as we learned in the first point, that's just full of financial intuitions advertising their products.

So what's the solution?

If you're ready to take back your piece of that $100 billion in overpayments, visit Solve Finance's website. We offer free home financing tools which can help you save over $5,000 on a mortgage typically by doing the mortgage shopping and math for you. If you'd like to make sure you never overpay on your borrowing or would like to lower your debt payments, try our Debt Optimizer app, which guarantees independent debt advice. You'll also have access to your credit score without ads or lots of unnecessary emails.

Suppose you're asking where the catch is with Solve Finance. In that case, our goal is to build a bigger business by being different and automating better borrowing for our users. In the future, when we start charging for our service, we will only earn when we save you money! We ensure we work for you, not a broken financial system, by only earning when you save.

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