Making “someday” come sooner: Saving while you pay off debt

Product framing
Experiment Type
Field Experiment
Increase program enrollment
Increase short-term savings
Focus Areas
Behavioral Concepts
Loss aversion Round number bias
Latino Community Credit Union
Partner Type
Bank/Credit Union

What Happened

It worked. The loss aversion language performed better than the control language. LCCU is currently in the process of rolling out the loan savings program to their other branches, with the loss aversion language used across the board.

Lessons Learned

Loss aversion language may be an effective framing to get members to stay opted-in to a loan-savings program.


A commonly held belief is that people should first pay off all of their debts, and only then can they begin to build assets. However, over 80% of Americans hold some form of debt, so if everyone prioritizes paying down debt before building assets, savings may be placed on hold for a very long time, if not indefinitely.

To help families build their short-term savings, we partnered with the Latino Community Credit Union, a North Carolina-based credit union with a mission to serve unbanked individuals and immigrant communities.

Key Insights

In 2016, we ran an experiment with EarnUp showing that homeowners were more likely to overpay on their mortgages if we asked them to “round up” their payment. This is because we are naturally attracted to round numbers.

We built on this work and asked ourselves if we could use a similar approach to get members to build up savings as they pay down their debt.


Working with a few LCCU branches, we defaulted all members coming in for a personal or auto loan into a loan savings program.

After calculating the standard monthly payment amount from the loan principal, loan officers rounded up the monthly payment amount to the nearest $25 (for personal loans) or $50 (for auto loans). The total amount was withdrawn all at once from the member’s bank account, but then was split on the back end. The original monthly payment was moved to repay the loan, while the additional round-up amount was moved to a savings account. All borrowers were defaulted into the program. However, they could easily choose to opt out of the loan savings program.

We designed a two-condition experiment to reduce the number of members opting out of the loan-savings program. The form they were provided varied by condition:

  1. Control: A simple check box allowing them to opt out of the program (“I don’t want to save as I pay off my loan”).

  2. Loss aversion: The opt-out message included the total amount they would save by the end of the loan period, indicating how much money they are sacrificing by opting out (“I don’t want to have $[640] in savings by the end of my loan payment period”).


During the course of the experiment, 220 members came in to take out a loan at one of the participating branches. While 26% of those in the control condition remained in the loan savings program, 38% of those in the loss aversion condition remained in the program. The results from the experiment were marginally significant (p = .056). By the end of the loan, members participating in the loan savings program will have saved $1,032 on average.

LCCU is currently in the process of rolling out the loan savings program to their other branches, with the loss aversion language used across the board. We anticipate that, on average, for every year that LCCU runs the loan-savings program, members will end up saving an additional $1.56 million.