In a Nutshell: Many American homeowners may feel saddled with interest that compounds over years and decades, costing them far more than the loan’s principal. For a decade, EarnUp has offered tools that help borrowers pay off their loans more quickly and with less interest in the last decade of the term. While the company focuses primarily on decreasing consumer mortgage debt, it has also developed products to help efficiently pay down other debt, including student loans, credit cards, and auto loans.
In recent years, the cost of everything from food to mortgage payments have been punishing for many Americans. Some 32% of American consumers — more than a year ago — say they run out of money between every paycheck, according to Nadim Homsany, CEO and Co-Founder of the loan repayment company EarnUp. This is even more likely to be true for women and minority populations.
“Over the past year, 43% of employees have depleted more than half of their savings, with 29% completely depleting all of their savings,” he told us.
As cash-strapped Americans look for ways to lower expenses, more homeowners turn to EarnUp to realize long-term savings.
The company’s value proposition is that “the power of three builds equity.” Many Americans receive a paycheck every two weeks, which comes out to three paychecks over two months in a year. EarnUp’s Payday to Payday® Auto Accelerator program allows them to easily leverage those paychecks to pay down their loans more quickly.
The financial challenges of the last few years have spurred the company to develop new partnerships with banks, employers, and individuals to encourage more people to use EarnUp. Most clients use the service for mortgage loans, but they can also pay back auto loans, credit cards, and student loans using the company’s tools.
EarnUp partners with service-oriented financial lenders and institutions to provide borrowers with solutions to personal debt.
Market Volatility Boosted Social Commitment
EarnUp has had a socially oriented mission since its launch, but the market volatility in the wake of the pandemic has encouraged the company to double down on its commitment.
Specifically, the COVID-19 shutdowns played a significant role in the ability of Americans to pay their mortgages. By late summer and fall 2020, somewhere around 10% of borrowers were in forbearance, Homsany said. This figure included some of EarnUp’s clients, and the company wanted to help.
“We are a double bottom line business, which means that we believe you can make a social impact and money at the same time. So, not only do we have a group of terrific VCs invest in us, we also have a number of nonprofits that have invested in us as well,” he told us.
That year, EarnUp was approached by one of its non-profit partners with a proposal to distribute money to people who were having difficulty making payments on their homes. Eventually, the company was able to distribute $150,000 to clients who were struggling to keep up with their mortgage payments.
After a temporary rebound, the market became even more unpredictable in 2022 and 2023. If a family were to buy a new home this year, for instance, they would pay a 6% interest rate on a 30-year mortgage — much higher than the home loan rates offered during the pandemic.
Using EarnUp products, they could save $110,000 in interest over those three decades.
The company said it wants more homeowners to know about its products,which is why EarnUp has sought out partner organizations that will also benefit from referring borrowers to the company’s repayment tools.
EarnUp Offers Peace of Mind for Borrowers
Consumers with low credit scores may feel they’re misunderstood by society, but this is a stigma Homsany wants to disrupt.
“There’s a belief that people miss payments on their loans because they don’t have the money to make those payments, or that they are incapable. I’ve heard people use the word deadbeat, and that’s simply not true,” he said.
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EarnUp was recently recognized for the impact of its revolutionary technology, winning a HousingWire Tech100 award and a 2023 Innovator Award by Progress in Lending. It also made the Financial Technology Report’s Power 300 list, which tracks the most important companies in the financial technology sector, including PayPal, Mastercard and Fiserv.