Payoff is an online loan marketplace that connects borrowers to fixed-rate personal loan offers that can be tailored to meet their needs. The company claims to apply science, psychology, and technology to help their members “reinvent their relationship with money and accelerate their journey toward financial well-being.” However, they mostly do what other personal loan companies do — let consumers borrow money at low fixed interest rates.
The biggest difference with Payoff is the fact these loans are geared toward consumers who need to pay off credit card debt. In other words, these loans aren’t intended other personal loan uses like home remodeling projects or large purchases.
Still, there’s plenty of reasons to apply for a loan from Payoff if you’re in debt. This popular loan platform offers flexible loan terms and may be available to consumers with less-than-stellar credit and high debt-to-income ratios. Payoff loan amounts can be generous if you qualify, and their starting APR is lower than many of their competitors. For that reason, we suggest checking them out if you’re stuck with high-interest credit card debt you desperately need to pay off.
Payoff Personal Loans: Key Takeaways
- Borrow between $5,000 and $35,000 to pay off high-interest credit card debt.
- Repay your loan in terms that range from 2 to 5 years.
- Interest rates range from 5.99% to 24.99%.
- You may be required to pay an origination fee of up to 5% of your loan amount.
- Payoff loans come with no application fee, prepayment penalty, or hidden fees.
Payoff Loans Review: Smart Personal Loans for Consumers with High-Interest Credit Card Debt
A recent survey from Bankrate revealed some startling (but not surprising) statistics on American credit card debt. Per the survey, only 44 percent of U.S. adults have more money in savings than they do in credit card debt. Meanwhile, a different Bankrate survey found that only 40 percent of people could cover an emergency expense of $1,000 or more in a pinch.
If you’re in a position where you’re struggling with credit card at a high interest rate, you already know how difficult life can be. While Payoff offers yet another way to borrow more money, they set their loans up with the goal of helping you escape debt instead of racking up more.
With a personal loan from one of Payoff’s partners, you can borrow money with a fixed interest rate as low as 5.99% APR. The goal is to use your loan to pay off high-interest debt at a lower fixed rate for up to five years. If you take debt repayment seriously and pay as much as you can without racking up more debt during your journey, the end result of your loan should hopefully be the beginning of a debt-free life.
We like the fact that Payoff loans come with no hidden fees, including:
- No application fees
- No early or extra payment fees
- No late fees
- No check processing fees
- No returned check fees
- No annual fees
Payoff personal loans also come with requirements to qualify that are fairly easy to meet, including a minimum credit score of 640 and a debt-to-income ratio of 50% or less.
As a bonus, Payoff lets you get “pre-qualified” for one of their loans without a credit check. If you’re approved for a personal loan, you can also have your loan funds deposited in your account in just a few business days. If you do follow Payoff’s suggestions and use your loan proceeds to pay off at least $5,000 in debt without racking up other debt, the lender says you could see your FICO score surge by as much as 40 points. Payoff even helps you track your progress by offering free updates on your FICO score through their platform. They may even pause your payments for a while if you lose your job, which is a major plus for anyone who is struggling with debt and job insecurity.
Payoff Personal Loans: What to Watch Out For
While Payoff doesn’t charge an application fee or any hidden fees, they are clear about the fact they may charge an origination fee of up to 5% of your loan amount. This could lead to hefty fee that will be hard to dismiss, especially since you’re taking out a loan to get out of debt. Also note that their best interest rates will go to consumers with great credit, but the opposite is also true. If your credit score is on the low side or your debt-to-income ratio is high, you could wind up paying up to 24.99% APR to service your debt.
That’s why, if your credit score is fairly high, you may want to shop around with other lenders and loan platforms. Several companies that offer highly-rated personal loans, including Marcus by Goldman Sachs, SoFi, and Earnest, don’t charge an origination fee (or any other hidden fees) and may give you a better interest rate. Some of them also let you get pre-qualified ahead of time without a hard inquiry, so there’s no reason to go with the first loan you’re approved for.
A final downside of Payoff is the fact these loans aren’t available everywhere. If you live in Massachusetts, Mississippi, Nebraska, Nevada, or West Virginia, you’ll need to find another lender.
Who Payoff Personal Loans are Good for:
- Consumers who have high interest credit card to pay off
- Anyone who can qualify for their lowest rates and a low origination fee
- Debtors who need the security of having a fixed monthly payment and fixed interest rate
How We Rate Payoff Personal Loans
At The Simple Dollar, we aim to provide a general overview of a lender’s products and services through a standard rating process. After a thorough research and discovery period, here’s how Payoff stacks up:
|Payoff Loans at a Glance|
|Affordability (interest rates, fees, and terms)||🌕🌕🌕🌕🌑|
|Availability (credit requirements, geographic reach)||🌕🌕🌕🌕🌑|
|Ease of Use||🌕🌕🌕🌕🌕|
How to Apply for a Personal Loan with Payoff
Applying for a personal loan through Payoff is easy thanks to their digital loan application and onboarding process. Plan on taking these steps as you prepare to apply for a loan:
- Provide basic personal information like your name, address, and income in order to get pre-approved for a loan without a hard inquiry on your credit report.
- Choose your loan terms and decide how much you want to borrow. Make sure to check your monthly payment and interest rate to make sure you can live with the terms.
- Include additional information on your loan application such as your Social Security number and employment information. Double check all your loan details before you submit your application for final approval.
- If your loan is approved with the terms and conditions you’ve agreed on, you’ll receive the money required to pay off your credit cards in your bank account within a matter of days.
The Bottom Line
If you have high-interest credit card debt and can’t seem to break free, a personal loan with a low fixed interest rate and better terms may be the solution to your problems. The fact Payoff lets you compare multiple loan offers from different lenders also means you can use it to shop around and compare before you pull the trigger.
No matter which lender you go with, taking the time to compare offers, fees, and terms is crucial. With enough research and planning, you should end up with the right personal loan for your needs and your budget.