Startup SpringCoin aims to help those in debt

Personal finance startup provides online debt relief tools and financial education services to consumers.

If one Y Combinator startup is successful, it might have just gotten a bit easier to get out of debt.

SpringCoin (formerly DebtEye), opens its online doors this morning with the noble intention of helping you, or possibly someone you know, get out of debt. No, SpringCoin won't pay your bills for you, but through a combination of its "smart-learning software" and human expertise, it will provide a detailed plan to get yourself out of debt.

SpringCoin isn't without competition, though. ReadyForZero, a fellow Y Combinator alum that also boasts an investment from Dave McClure of 500 Startups, provides a simple debt tracking utility that allows users to set and monitor their own payment plans. Users then receive timely reminders instructing them how much they owe and how much to pay.

BillShrink, on the other hand, approaches debt a bit differently than the other two. By connecting consumers with better savings on regular purchases, it attempts to tourniquet the parts of our wallets from which cash most often bleeds. For instance, BillShrink could help a user save money on both a satellite TV plan and fuel costs, which could free up funds to, in theory, pay off outstanding bills.

While ReadyForZero and BillShrink may have the best intentions for its users, both services are monetized through advertisements. The problem that SpringCoin sees with this model is that many of the individuals in its targeted demographic have found themselves in debt due to poor financial literacy. Presenting cost-saving deals to its users could create additional charges that lead them deeper into debt.

Rather than generating revenue from advertisers who might not always be appropriate for debt-vulnerable consumers, SpringCoin will launch with two paid plans. Its basic tier will provide spending monitoring, bill reminders and basic financial education tools.

The premium plan is a bit more complicated. SpringCoin qualifies users by calculating the estimated savings based on the debt information provided, and if it's determined that the potential customer cannot save at least 5 percent using the premium service, the startup will recommend the basic package. In addition to the services included in the basic package, premium users will also receive negotiation tools to assist in lowering monthly payments, automatic bill pay, a complete set of financial education tools, and 24/7 financial advice.

The basic plan will cost $8 per month, while those qualifying for the premium service will be on the hook for a monthly fee of $35. Whether those in debt will tolerate yet another bill is debatable, but with credit situations being what they are, it's clear at least that there is no shortage of individuals needing assistance in making more prudent financial decisions.

A general operating strategy for startups is to identify a problem affecting a large group and develop a solution. In that regard, SpringCoin is arriving on the scene with a potentially viable solution to a immensely large problem at a particularly apt time.

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