When you have one or more high-interest credit cards that you’re making payments on every month, consolidating that debt into a personal loan might be a smart financial move. Doing this will enable you to pay off the money you owe much faster and save thousands in interest, as personal loans usually have lower interest rates than credit cards.
When you’re shopping for a consolidation loan, you want to make sure that the lender you choose is reputable and trustworthy, especially when there are so many types of lenders available in the current market. Payoff is one such company that allows you to file one application and receive one or more 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.
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 consumers on their way to improving fiscal health.
What all of this boils down to is that Payoff helps provide personal loans for consolidating high-interest credit card debt. But Payoff is not a lender or bank. Rather, they work with a group of verified lenders to originate 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 three credit unions (Alliant, First Tech Federal Credit Union, and Technology Credit Union) and one bank (First Electronic Bank) to originate loans.
Payoff personal loans
Payoff only offers one type of loan, a personal loan to pay off high-interest credit card debt. You can borrow between $5,000 and $35,000 for a term of 2 to 5 years. APRs vary between 5.99% and 24.99% (as of Jan. 23, 2020), 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.
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.
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 inquiry 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.
Payoff considers several factors when evaluating your eligibility for a loan. First is your FICO score, which should be at least 640. They also look at your debt-to-income ratio, which looks at how much you owe per month against how much you earn. Payoff prefers a ratio of 50% or less in an applicant.
You need to have at least three years of credit history, as well as no more than two new accounts or one new installment loan opened within the last year. Finally, they want you to have no current delinquencies, and none greater than 90 days in the past 12 months. If you fit all of these criteria, you could qualify for Payoff loan offers.
|Loan amount||$5,000 to $35,000|
|Loan term||2 to 5 years|
|APR||Fixed rates of 5.99% to 24.99% (as of Jan. 23, 2020)|
|Origination fee||0% to 5% of amount borrowed|
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 2 stars out of 5, based on 25 customer reviews and 17 filed complaints. Payoff is BBB accredited 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, 28 customers give Payoff an average of 4.5 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 service 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 debt with a Payoff loan, your scores may 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 can 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 fee for paying off a loan early.
The final word on Payoff
Payoff is one of many online personal loan providers. They are unique in that they promote financial health and use 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 what you need to do to qualify for 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 Payoff is one tool you can use while you research your options.
All rates and fees are accurate as of Jan. 23, 2020.