Is there a Deposit Doomsday Pending for Banks?

Why the Student Loan Resumption Spells Trouble for Banks as Well As Borrowers

The pending student loan resumption is something that has the potential to cause major financial woes for borrowers.  With the decision now made to restart student loan payments in October many people are wondering how they can make their budgets stretch to cover this.  But the worries don't stop there.  

Interest charges on student loans are set to start again for September 1st meaning that even before repayment begins those student loans will be accruing interest and adding to the debt balance. However, what are the potential concerns for Banks?

Once payments on student loans resume, banks face the daunting fact that $17B in deposits will leave their accounts on a monthly basis for student loan payments

They are likely to be hit with a double whammy too, since many people are likely to have to reduce their consumer spending in other areas in order to make the resuming loan repayments.  

A further reduction in consumer spending alongside a huge outpouring of deposits could spell trouble for many banks.

So what’s the answer?

Payitoff provides a range of debt guidance solutions that can provide a win-win answer!

Payitoff debt guidance products can be embedded directly into existing bank apps or websites, providing borrowers with the potential to save on $240 on average on their student loan repayments. A money-saving win for borrowers!

This also means that this average of $240 per borrower remains within bank deposits- helping to soften the blow on the pending deposit leakage that is about to occur. A welcome result for banks.

If you are a bank and you’d like to see how Payitoff solutions can benefit your customers and help you soften the blow to your deposit levels, get in touch.