ReadyForZero, an online financial service (and YC alum) focused on addressing a real need – getting people out of debt faster – appears to be working. The company, which is now reporting 13% month-over-month growth, says its users have paid off $12.5 million in debt to date, out of the nearly $200 million worth of debt managed by the service. That number has been growing quickly, too. Just a few weeks ago, it was at $8.5 million, then jumped up to $11 million after the first week of March, and, as of today, reached the $12.5 million mark.
Something which will help that number grow even further is the company’s newly launched Savings Platform, which will show offers to users from ReadyForZero’s financial partners, without sharing users’ personal information with the partners in advance.
“We’ve always wanted our product to eventually be like a marketplace,” explains ReadyForZero CEO and co-founder Rod Ebrahimi, ”people can show their performance over time, and say: ‘Look, I’m doing really well – here’s a real-time snapshot of their finances with respect to my debt and my cash flow…why don’t you offer me a better rate?’”
This new savings platform is the first step towards that goal, says Ebrahimi.
The privacy-focused feature is different from what the big banks are used to (traditionally, they acquire new customers via lead generation). Now, they have to work with ReadyForZero by providing access to their own algorithms and requirements in order for the startup to target users on its end. But for users already wary of having their financial details floating around, there’s a benefit in being able to securely receive these offers and consider them while remaining anonymous.
For example, when suggesting a consolidation loan, ReadyForZero would show the user how much money they would save, what the interest rate would be, how much the monthly payments would be reduced by, and how much quicker you would be able to pay off the debt. Likely, the user would then accept the offer, and only then would the financial institution be introduced to the customer in question.
During the service’s first week in action, customers secured over $100,000 in consolidation loans, Ebrahimi tells us. The first partner in the launch is LendingTree, but discussions are underway now with other banking partners, whose integrations are expected by next quarter. Citi, it should be noted, is a minority stakeholder in ReadyForZero, so it will surely be on board soon.
But perhaps most importantly, for users, ReadyForZero is working. Already $10 million+ in debt ($12.5M as of last night!) has been paid off for startup’s early adopters. But the question for the company now, is how to grow the user base?
After all, telling your friends you’re in a huge amount of debt may hinder word-of-mouth style recommendations.
“It’s not something everyone necessarily wants to tell their friends about,” Ebrahimi admits. The new thinking is that the company may experiment with providing sharing mechanisms for those users who are now about to pay off their entire debt. That’s something people might like to brag about, Ebrahimi thinks.
Also on the near horizon for the startup is a mobile application. The app, launching first on iOS in about a month, will provide users with a read-only look at their financial situation while on the go.
If you don’t think you’re in enough debt to be in need of a service like this, the company has also just launched a tool to convince you otherwise. This credit card debt calculator tells you how much your debt really hurts you in terms you can understand. For example, $10,000 in credit card debt will take over 27 years to pay off, if making minimum payments. And the interest you’re paying equals 2.7 cappuccinos per week, 8.9 tanks of gas per year, or 24 iPhones over the lifetime of the debt. (Ouch). Meanwhile, if you don’t need any convincing, you can just sign up here to try ReadyForZero instead.
ReadyForZero creates online financial software that helps people control and reduce debt. It’s not a “debt negotiation” or “debt settlement” service. The company was co-founded by Rod Ebrahimi and Ignacio Thayer as part of Y Combinator in the Summer of 2010. ReadyForZero is a venture-backed technical product team based in San Francisco.