DebtAlert

**Have just come across www.readyforzero.com which seems to be what I was thinking about. Bummer. I'll see if I can think of a way to do it better otherwise I might have to start again.

(Initially) Simple tool for assessing a current debt (Credit card, Personal Loan, Home Loan/Mortgage etc.) of a user and assisting them with identifying the benefits of paying additional amounts sooner. Once a goal is identified, behavioural based alerts will be sent to the user to encourage them to maintain their agreed additional amounts and continually update them on the benefits of what they are doing (ie. the 'true' value of that payment). 

It will work as follows:

Step 1 - User registration and basic details

  • Debt size
  • Debt interest rate
  • Payment/statement date
  • Debt type (Loan, Credit card, etc.)

Step 1's goal is to be able to accurately model a users debt situation in order to be able to make the most appropriate recommendations for additional repayments.

Step 2 - Basic financial position

  • Income
  • Expenses

Step 2 looks simple but this will be where you can work out what expenses are mandatory and which ones are discretionary. The reason for this becomes most apparent in Step 3

Step 3 - Recommendation + repayment plan

  • Demonstrate standard loan repayment (ie. based on Step 1 details and minimum calculated repayment)
  • Demonstrate accelerated loan repayment (This is done by increasing the calculated repayment amount as a user commits to reducing various discretionary spending amounts)

The accelerated loan repayment period is where a user really sees the value of paying an additional amount as it will factor in interest saved and the shorter loan term to give a "true" value of what the additional repayment amount is worth. People often have trouble factoring in all of the benefits and this is the goal of this process.

Step 4 - Follow up plan

Step 4 is ongoing and is designed to be as intusive/non-intrusive as a user chooses. They can choose to get daily/weekly/fortnightly/monthly reminders of their accelerated repayment plan. This can also be aligned with the date that the minimum repayment falls due to prompt them at the most appropriate time to pay more. 

Follow ups can be delivered via email or text message. 

This is the MVP as I see it for now. Future enhancements could include:

  • Collect details of loan provider - This will enable benchmarking of providers, assessment of whether or not the user is getting the best deal on their debt and as the body of users grows, help to understand who the most appropriate lenders are
  • Yodlee (yodlee.com) integration which will make it easier for users to provide access to their loan/credit card account. This will allow the application to access all manner of information including repayments as they occur, interest charges, balances etc.. Key to using Yodlee is it lowers the barrier to entry for a user as it lets us get the data for them
  • White labeling. This service would be a great tool for social debt relief groups and potentially loan brokers who could offer it as a value add to their clients and demonstrate their commitment to socially responsible lending
  • By collecting real data, we'll have a great base from which to help advise people as to what sort of loan situation is appropriate for them. 
  • A mobile site/app (dare I say it). With Yodlee integration, it could push alerts to users to congratulate them in almost real time for sticking to their repayment plan and prompting them to stick to it should they fall behind the accelerated plan they initially committed to.

Thats about it from me for now. Any thoughts/questions appreciated. Let me know if you want to work on this. 

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