Y Combinator alumni ReadyForZero has added a new arsenal to its repertoire: online payments. Known for being a service that allows people to manage and reduce their debt, it will now enable users to easily use their available funds to pay off their debt in a convenient manner.

Started in 2010, ReadyForZero’s goal is to create a company that is the “only comprehensive online resource for automatically managing personal debt and building wealth.” It was created when founder and CEO Rod Ebrahimi’s friends graduated from college and asked him if there was an online resource to help manage debt, only to find out that one didn’t exist — even Mint didn’t fully solve this problem.

ReadyForZero hopes to help raise user awareness of what it will take for them to decrease their debt. So far, it is managing $350 million in debt for thousands of Americans and helped pay down $25 million. For those interested in getting started, they can sign up for a free plan. After filling out the necessary information and securely linking it to their financial data (it has over 1,000 sources to pull from), the system will detect your assets, liabilities, loans, credit bureau data, etc. instantly to build as accurate of a profile as possible. Afterwards, ReadyForZero will make specific real-time recommendations based on your transactional behaviors to help save you time and money.

Since it’s dealing with financial information, security might be an issue. Ebrahimi assured me when we spoke, that the company has the same type of security as any financial institution and it has partnered with Yodlee, which has relationships with numerous institutions and impeccable credentials. What’s more, ReadyForZero does not store any data on its servers, Ebrahimi said, and user privacy is taken seriously.

readyforzero screenshot01 520x536 YC alumni ReadyForZero adds online payments as a convenient way to pay down debt

With the release of online payments, users can examine their financial situation and make payments to outstanding debt in an easy manner. You can pick which debt you wish to pay off, from what account should it be paid from, and when you want to pay it off. Using its algorithms, ReadyForZero will also tell you how much interest you will save when you make your payment.

In addition, since your account is linked to your financials, if a deposit is made into your bank account, ReadyForZero can send you an email asking you if you would like to any or all of those funds to pay off your outstanding debt.

Right now, the service will only permit users to make payments of up to $500, but Ebrahimi says that this limit will increase as more business rules are put in place. It also has a mobile application users can download, but the online payments feature isn’t available yet — this service should go live within the next three months, Ebrahimi tells me.

ReadyForZero initially raised $260,000 in seed funding from the likes of YC, YouTube co-founder Steve Chen, Dave McClure, and others and last year raised $4.5 million in Series A funding from Polaris Ventures and Citi Ventures. It is currently free to use, but if you wish to use the new payments functionality, it is available only in the United States and will cost $4.99/month. Additional debt reduction and wealth-building automations are planned next year.

Image credit: Ben Harding/Flickr