When you have one or more high-interest credit cards you’re making payments on every month, consolidating that debt into a personal loan might be a smart financial move. Doing this could enable you to pay off the money you owe much faster and save thousands in interest, as the best personal loans usually have lower interest rates than credit cards.
When you’re shopping for a debt consolidation loan, you want to make sure the lender you choose is reputable and is also offering you a competitive rate. Payoff is a well-known company that allows you to file one application and receive loan offers to pay off your high-interest credit card debt.
This guide will give you insight into how Payoff works, what to expect, and other things you need to make an informed decision about whether or not to submit an application.
Payoff helps borrowers consolidate credit card debt quickly and easily.
- Check your rate in as little as 3 minutes
- Choose a loan term that meets your needs
- Get one simple, fixed payment
An overview of Payoff
Payoff describes itself as a financial wellness company that uses science, psychology, and technology to help people develop a healthy relationship with money. They employ tech experts, research and clinical psychologists, data and neuroscientists, as well as financial services professionals to provide support, service, and products designed to empower borrowers on their way to improving fiscal health. This includes welcome calls and quarterly check-ins for Payoff customers.
What all of this boils down to is that Payoff helps provide a personal touch to personal loans for debt consolidation, specifically for multiple lines of credit card debt. But Payoff is not a lender or bank. Rather, they work with a group of verified lending partners who originate the loans. When you complete an application with Payoff, they look at your information and run a soft inquiry to your credit reports.
Payoff is owned by Happy Money, a financial services company that also owns Joy, an app that uses psychology to help users make smarter spending choices. What they all have in common is a focus on how people think and behave to help build positive outcomes when it comes to spending and borrowing money.
Payoff has been in business since 2009 and currently works with a variety of financial institutions to originate loans.
Payoff personal loans
Payoff offers one type of loan, a personal loan for credit card debt consolidation. You can borrow between $5,000 and $40,000 for a repayment term of 2 to 5 years. APRs (annual percentage rates) vary between 5.99% and 24.99% (as of July 11, 2022), so make sure if you receive an offer that the interest rate is really less than what you’re currently paying on your credit cards before accepting the loan. The idea is that you are essentially refinancing to get a better interest rate on your debt.
Payoff loans are best for applicants with a steady income, fair-to-good credit, and who have thousands in high-interest credit cards that they want to pay off with one monthly payment. Borrowers must be at least 18 years old. You will also need to have a valid Social Security number and checking account. You will likely be asked to provide recent pay stubs and a bank account statement as well.
There are no application fees to apply for a Payoff loan and, initially, only a soft inquiry is performed, so your credit score isn’t impacted. When you apply for a loan, a hard credit check will be performed, which could impact your credit score. If you are approved and accept the loan, you will be charged an origination fee between 0% and 5% of the amount borrowed.
The origination fee is the only fee you'll be charged. Payoff does not charge prepayment fees, late fees, check processing fees, or returned check fees. They state that you will receive your loan money between 3 to 6 business days after you sign your final documents (which can be done electronically).
Payoff considers several factors when evaluating your eligibility for a loan. First is your FICO score, which should be at least 600. They also look at your debt-to-income ratio, which looks at how much you owe per month against how much you earn. Other factors Payoff might consider for approval include the age of your credit history, how many loan accounts you've opened and if you have delinquencies, and your credit utilization.
|Loan amount||$5,000 to $40,000|
|Loan term||2 to 5 years|
|APR||Fixed rates of 5.99% to 24.99% (as of July 11, 2022)|
|Minimum credit score||600|
|Origination fee||0% to 5% of amount borrowed|
Payoff does not currently offer loans in Massachusetts and Nevada.
Is Payoff a good loan company?
Customer sentiment about Payoff seems to be split, depending on which sources you review. The company’s Better Business Bureau profile shows an average rating of 1.48 stars out of 5, based on 62 customer reviews. Payoff has been BBB accredited since 2015 and has earned an A+ rating.
Most negative comments focus on the significant time spent waiting for issues to be resolved and refunds to come through, difficulty in resolving issues through customer service calls, and misleading communications about preapprovals.
However, 345 customers give Payoff an average of 4.9 stars out of 5 on Credit Karma. Positive remarks across all of these websites praise the easy application process, transparency in presenting loan and interest options, the quality of the loan offers and how they fit with customers’ lifestyles, and the customer service experience.
FAQs about Payoff
Where is Payoff located?
Payoff is headquartered in Costa Mesa, California. Its address is:
3200 Park Center Drive, Suite 800
Costa Mesa, CA, 92626
You can also contact Payoff’s customer support team at 1-800-878-0901 on Mondays through Fridays from 7am to 6pm PST and Saturdays from 8am to 5pm PST.
Can you have two Payoff loans?
No, Payoff only allows you to have one loan open at a time.
Does Payoff hurt your credit?
Checking what rates and offers you qualify for doesn’t impact your credit, since Payoff performs a soft inquiry for this. If you choose to move forward with a loan offer, a hard inquiry will be performed when you submit an application, which can stay on your record for up to two years and could lower your score for a few months.
If you agree to a loan, receive funds, and begin the repayment period, missed payments or defaulting on the loan will have a negative impact on your credit. However, timely payments will have a positive effect.
When you pay off your existing credit card balances with a Payoff loan, your scores might go up, as the amount of revolving credit you’re using will have gone down significantly. Payoff claims that when customers pay off $5,000 in credit card debt, their FICO scores could go up an average of 40 points.
Can you pay off a Payoff loan early?
Yes. Payoff encourages making additional payments to their loans and does not charge a prepayment penalty for paying off a loan early.
Bottom line on Payoff
Payoff is just one of many online personal loan providers, but it did make our list of the best personal loans. They are unique in that they promote financial health and use both psychology and technology to help create positive relationships between consumers and their finances. They are also very clear and upfront about what they offer and how to get a loan.
Overall, this service is worth reviewing and submitting information for a rate check, as your credit score will not be affected by doing so. Carefully consider the offers you receive in return, then compare Payoff’s options with other lenders. The bottom line is that you are in control of who you choose to borrow from and it's valuable for you to research your options.
All rates and fees are accurate as of July 11, 2022.