Author Topic: Bank or service that automatically sends excess to loans  (Read 1858 times)

essjay43

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Bank or service that automatically sends excess to loans
« on: June 11, 2014, 11:23:58 AM »
I was wondering if there's any banks that have the ability to automatically apply excess $$ to loans. It's kind of difficult to explain, but I currently have a target amount for the money I would have to have in my checking and savings account. When I reach that threshold, I send any excess to my highest interest loan.

It would be great to automate this process, but I haven't seen any banks that provide this service.

I'm sorry if I sound lazy, but it would definitely be helpful.

kyanamerinas

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Re: Bank or service that automatically sends excess to loans
« Reply #1 on: June 11, 2014, 11:33:07 AM »
I've heard of it for mortgages or something in the UK, often known as a 'sweep' feature I think. both accounts (the in-credit and the debt) have to be with the same bank.

http://en.wikipedia.org/wiki/Sweep_account

wiki suggests it's only for investments.

essjay43

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Re: Bank or service that automatically sends excess to loans
« Reply #2 on: June 11, 2014, 11:49:21 AM »
Thanks. I just looked into the sweep accounts and there is something called "loan sweep." It looks like it's mostly used commercially for companies paying off credit lines within the same bank.

Would be a good service for personal accounts. Instead of online bill pay or scheduling automatic payments, anything above a certain balance could be applied to a particular loan or investment account.

Bourbon

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Re: Bank or service that automatically sends excess to loans
« Reply #3 on: June 11, 2014, 11:52:44 AM »
I know some people use direct deposit to do something similar to contribute to investment accounts.  Deposit X into savings, Y into checking and the remainder goes to Vanguard.


I wonder if you could do that with the loan account?  I know generally you have to specify checking or savings for the ACH deposit to go through, but it might work. 

gooki

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Re: Bank or service that automatically sends excess to loans
« Reply #4 on: June 13, 2014, 01:59:17 AM »
If your well disciplined with you money, consolidating all you loans into a revolving mortgage/line of credit can be very effective (essentially it's a massive overdraft), and has some added benefits over the sweep model.