Payoff personal loans focus solely on helping their members reduce high-interest credit card debt. In the United States, credit card debt is mounting into the billions and continues to rise—especially for Millennials. Financial experts agree that credit card debt should be paid off before auto loans or mortgages, as this kind of debt can balloon quickly due to high-interest rates.
Individuals who are in need of debt consolidation loans but do not have credit card debt will not be approved by Payoff.
Payoff’s borrowers may choose a loan term length that works best for them. Options for term lengths range between two and five years. You have the opportunity to preview and agree to the loan’s terms before accepting the funds.
The rates for Payoff personal loans are potentially half of what many customers are paying on their credit card debt. APR ranges from 5.99% to 24.99%. This is determined by the individual’s creditworthiness along with other factors. Payoff’s APRs are fixed, not adjustable. This means your rate will stay the same throughout the life of the loan.
Unlike many lenders, Payoff is transparent with their fees. They charge an origination fee that equals between 0% and 5% of the total amount of the loan. However, the fee is only charged once and is not hidden within the repayment process. The only other fee they charge is a returned payment fee of $15 per payment.
They also do not charge many other common fees, specifically:
When applying online for Payoff personal loans, individuals are able to choose the loan amount as well. You can choose to borrow between $5,000 and $35,000, but a member advocate will contact you to discuss the requested amount.
Sometimes, the approved loan amount may be less than what you have requested. Payoff will make this determination based on their experience with your particular kind of debt.
Individuals interested in applying for a Payoff personal loan should first review the requirements and check for errors or other concerns in their credit history before they apply online.
With the low rates and personalized support offered by Payoff, the qualifications for approval are stringent but also quite transparent. The criteria considered are:
Payoff uses TransUnion, which may differ from other credit bureaus, when determining credit scores. Qualifying borrowers must have a score of at least 640.
In order to receive a debt consolidation loan to pay off your credit cards, you must be able to demonstrate that your annual income is at least $25,000.
It does not take long to rack up credit card debt, but Payoff requires that you have at least three problem-free years on your credit report. You also must have two open lines of credit with payments you’ve made on time. This should include no more than one installment loan, including what are known as point-of-sale or “buy now, pay later” loans, taken out within the last year.
Because the Payoff personal loan program is focused specifically on paying off credit card debt, credit card debt is a requirement for approval. If you plan to use the loan to consolidate other debt, such as student loans, auto loans or medical bills, you will have to seek another lender.
However, you should not have credit delinquencies on your credit report. If you have outstanding payments, you should resolve those issues before applying for Payoff personal loans.
Also known as a DTI ratio, a debt-to-income ratio is simply your monthly debt payments divided into the amount of money you bring in every month before taxes and deductions. To qualify for a Payoff loan, your debt-to-income ratio must be 50% or less. For example, if your combined debt payments are $500 each month, your monthly income must be at least $1,000.
There is a four-part process for applying for a Payoff loan:
Members are able to pay down their loans each month through a direct withdrawal from their bank account. However, if you wish to pay extra toward your loan, you will either have to pay exactly the same amount as your normal payment or switch to manually submitting each payment from your bank.
Overall, customers report that Payoff’s application and approval process is extremely fast. If there are questions, member advocates are available from 7 a.m. to 6 p.m. PST Monday through Friday, as well as 8 a.m. to 5 p.m. PST on Saturdays. Members may also leave a message after hours for a response once the office reopens.
To contact a member advocate, the options include:
Payoff additionally takes pride in having a much more robust customer experience beyond the initial approval process. As is evident by the fact that the company calls its customers “members,” they offer benefits to those that join them. The benefits include:
One of the most unique benefits for those with Payoff personal loans is that there are no penalties for missing payments. You have the ability to work with a representative to either defer the payment, change the date the payment is due, or even skip the payment altogether.
Payoff understands that not everyone looking to eliminate their credit card debt can qualify for their program. If you apply but do not have a high enough credit score to be approved, Payoff will offer enrollment in a program called Lift.
Lift offers tips and tools to help people improve their credit scores, cut spending, and regain control of their finances over time. One tool available is a categorization of your spending habits based on your banking activities.
For those who qualify and are committed to improving their financial health over the long run, Payroll personal loans can offer a solution to eliminating or greatly reducing credit card debt.
Based in Costa Mesa, California, Payoff started in 2009 as less of a lending agency and more of a behavioral science experiment.
The founders partnered with researchers, clinical psychologists, data scientists, and neuroscientists to help customers change their mindsets in order to fundamentally change how they make financial decisions.
Customers, whom Payoff refers to as “members,” work one-on-one with Payoff’s “member advocates” to alleviate their debts and get their money to work for them.
Payoff is not a bank, but rather a financial wellness company that works with lending partners to originate loans ranging from $5,000 to $35,000 for those who qualify.
They offer extremely competitive rates, making Payoff’s loans an attractive option over many high-interest credit cards. To originate the loans, Payoff works with First Electronic Bank. This bank is insured by FDIC and based in Utah.
Along with debt consolidation options, Payoff offers members a wide variety of educational materials that support a path to financial freedom. Payoff’s blog is filled with useful tips and suggestions on personal finance, while the company’s “Happy Money” team has an interactive app built to change your perspective on money while increasing your happiness.