29th April 2022 | 4 minute read

Repayment nudges

Repayment nudges are the most common type of nudge to be shown in the ilumoni app, other than the Debt Advice nudges, and around a third of users had at least one type of repayment nudge as of March 2022. But they come in many forms, so we’re breaking down the types in this blog today. 

What is a repayment nudge?

Put simply, a repayment nudge is shown when you could save either money in interest or time to repay by changing the way in which you repay a balance. They come in three forms:

Fixed repayment

This nudge will suggest that, instead of paying the minimum monthly repayment or a variable amount (so not a regular, fixed payment), you instead ‘fix’ your payment at a specific amount. So, if your minimum repayment this month is £50, you would set up a direct debit to always take £50, rather than the minimum. 

For example, if you had a credit card with an APR of 34.9% and a balance of £1119, paying only the minimum payment each month, with no further borrowing, would cost £2517 in interest and take 20 years and 11 months to pay off. 

By simply fixing your payment at the current minimum repayment (£39 in our example here), with no further borrowing, it would cost £874 in interest and take 4 years and 3 months to repay. 

That’s a saving of £1,643 in interest and a huge 15 years and 8 months off the time to repay.

Regular overpayment

This nudge shows how much you might save by paying an additional amount each month on top of your normal repayments, again assuming no more spending. If you get this nudge in the app, you’ll see a sliding scale that you can use to see the impact paying different amounts will have on the total cost of that borrowing. So, if you’re only paying the minimum, you’ll explore what paying the minimum + £XX would do to the time to repay and the amount of interest paid. If you’re paying a fixed amount already, you can view the impact of increasing the fixed amount you pay.

One-off overpayment

This nudge is based on account information that you’ve provided in the app and will suggest that based on the information we can see, you may have money leftover this month that you could put towards paying down your debt to save money in the long run. 

For both the regular overpayment and one-off overpayment nudges, the ilumoni app looks at your main current account (via Open Banking) to see whether you’re likely to be able to afford the additional extra money. 

Why was this nudge introduced?

The repayment nudges were one of the first key pieces of functionality in the ilumoni app, and that’s because making changes to your repayments is a relatively easy and simple way to better manage your debt without taking on more debt. 

There are now a number of different nudges in the ilumoni app, all of which focus on different aspects of your borrowing. Not all users will see all, or specific types, of nudges though because they’re personalised to you and based on the information you’ve chosen to share with the app. Discover our other nudges in our ‘About the app’ guide now. 

Who will be able to see and use this nudge?

This nudge will be visible to anyone who could save money in interest or time to repay through changes to their repayments. If you think you should be seeing a repayment nudge and aren’t, the first thing to do is ensure you’ve connected all your available accounts and balances to the app. Remember, ilumoni can only make calculations based on the information you’ve shared with it.

Connecting your accounts is really simple. Just go to the profile area of the app and, under ‘Linked accounts’ click ‘Add a new account’. If you have any problems connecting your accounts, just click the pink smiley face in the app to let our support team know. 

If you’re regularly overdrawn, or your account regularly has a low balance (close to zero) you’re unlikely to see our repayment nudge. 

How will the app know which nudge to show me?

At ilumoni, we believe that how you manage your borrowing should be your choice and our aim is to give you a useful tool and relevant information to help you make confident decisions. As a result, you may see more than one type of nudge in the ilumoni app at any given time - you can find an overview of all our nudges here. This way, you can explore the impact of the different options available to you and choose what’s best for you, based on your circumstances.

You’ll only ever be shown nudges that the app determines will have a benefit for you, for example, ones that could save you money or help simplify your borrowing. However, you know your specific circumstances in full and should consider what is best for you alongside any other available options.

If you have any questions about the repayment nudges or want to know more, please get in touch with our support team via the app or the contact form on our website, and they can provide you with further information. 

If you're concerned about your finances or are struggling with debt, the organisations on our Debt Helplines page can offer you additional support or advice. 

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