ThriveCash thinks they have the answer for students who secure amazing internships, but don’t have the savings for a down payment on housing.

ThriveCash is a “fast cash” app.

It gives students the ability to receive up to 25% of the salary they’d earn during the first three months of their internship. All they have to do is provide an internship or job offer letter.

Many college students struggle with personal financial management. An October 2018 study by the Brookings Institution, a research group and think tank based in Washington, D.C., found that undergraduate students in the United States have low levels of financial literacy.

The service ThriveCash is dramatically better than current financing options. Credit cards and student loans charge high, compounding interest rates. But ThriveCash is different. It leverages students’ future income, and allows students to access an affordable line of credit which hasn’t existed before.

MaryAnn Monforte, a professor of accounting practice at Syracuse University, said many students haven’t needed to seriously budget their money before. “Where we’re at technology wise has eliminated a lot of the manual financial bookkeeping that we used to need to do.”

College students today have difficulty building traditional credit and many are bogged down by student loans. ThriveCash is trying to create a new way for students to access money, and it could foreshadow a major shift in how younger, debt-heavy generations will use loans.

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ThriveCash is a novel concept. It’s way different from credit cards and traditional personal or student loans. It also plays a much different role, with more specific use cases.

Deepak Rao, co-founder ThriveCash and Stanford University alum, said he had a tough time accessing traditional financing tools — especially as an international student.

With ThriveCash, college students can apply for a loan and schedule their payments through a mobile app. Students start making payments around the time their job starts.

ThriveCash targets students with internships and jobs lined up, international students and students from low-income families who need money for college extras.

On ThriveCash’s website, the service is marketed as a way to pay for housing, tuition and other bills. It’s also marketed as a way to pay for traveling, spring break and Greek life fees — all extra expenses that could lead students into financial trouble. Rao said he believes it’s OK for students to spend money on these types of activities, if they do it responsibly.

“We have enough visibility into their finances to make that decision on their behalf,” Rao said.

Anna Henderson | Digital Design Editor

According to Rao, ThriveCash conducts what’s known as a “soft-pull” on applicants’ credit. This type of check has no impact on a borrower’s credit score. But this allows ThriveCash to see their outstanding debts. Rao said that if an applicant has a significant amount of outstanding credit card debt, they could be turned down.

ThriveCash doesn’t charge compounding interest like traditional and student loans do. The high interest rates on student loans can lead students to paying back much more than they borrowed, which can create a heavier financial burden for much longer.

“We never give more money than people can responsibly pay back,” Rao said.

Rao and his team use data and analytics to determine the optimal amount of money to offer students. Everyone receiving a loan from ThriveCash receives the same interest rate — 12%. Interest rates on private student loans can vary depending on credit and cosigners.

Students need to be sure they’re prepared to budget their expenses before they use a service like ThriveCash. If prepared, ThriveCash can offer a much more attractive alternative to traditional loans or credit cards.

Daniel Strauss is a senior finance major and public communications minor. His column appears bi-weekly. He can be reached at dstrauss@syr.edu and followed on Twitter @_danielstrauss.

Published on April 10, 2019 at 11:41 pm