At the end of 2015, the average American with credit card debt carried a balance of over $15,700. Unsecured and subject to high interest rates that can rocket to 40% APR and above, keeping this kind of debt on your financial rolls for too long can have lingering long-term consequences. Payoff is a personal loan company that helps consumers manage their high-interest credit card debt through personal loans designed for debt consolidation. Before proceeding with an application for a Payoff personal loan, it’s a wise idea to obtain a copy of your credit score, do some research on this company and check out comparable options from other lenders.
How to Apply
Payoff personal loan applications take place entirely online. To start, borrowers give the company some basic information and check available interest rates. Payoff then performs a soft credit check (this doesn’t affect your credit score at all) and presents borrowers with one or several offers. This generally takes just a few minutes.
Once borrowers choose the offer they want, they start the more involved application process, which includes a hard credit check and supplementary materials such as proof of income, photo ID and bank account information. This process can take a few days.
Payoff markets itself as serving a specific subset of borrowers with high credit scores, high income and at least $5,000 of credit card debt. The company uses a complex algorithm to assess not only your lendability, but the likelihood that granting you this personal loan can actually lead to long-term debt reduction rather than serve as a bandage that facilitates taking on even more debt. As such, the requirements to get a Payoff loan are quite high:
- Minimum credit score of 640 (most borrowers have a score of 720 or above)
- Maximum debt-to-income ratio of 50%
- Minimum of 3 of years good credit history
- Minimum of 2 open accounts in good standing
- Maximum of 1 installment loan opened in the last 12 months
- 0 current delinquencies and none over 90 days in the past 12 months
The terms and conditions of each Payoff personal loan vary according to the borrower’s needs and qualifications:
- Principal Amount: $5,000–$35,000
- Interest Rate: 5.99%–24.99% fixed APR (Annual Percentage Rate)
- Terms: 2–5 years
- Time to Receive Funds: 2–7 business days from loan approval
- States not Operating: MA, NS, NE, NV, OH, WV
Fees and Penalties
One of Payoff’s goals is to present borrowers with a completely transparent and easy-to-understand lending process. As such, the company keeps its fees minimal and is very up front in the information it discloses. There is really only one fee for a Payoff personal loan: an origination fee of 0%–5%, depending on the loan’s term. This fee is rolled into the loan itself.
Perhaps more significant are the fees and penalties Payoff loans don’t have. As of September 2018, these include:
- No application fee
- No annual fee
- No early payment penalty
- No late fees
- No personal check processing fees
- No returned check fee
Learn About Personal Loans: Why Payoff Is Different
Unlike many other personal loan types, Payoff personal loans are extremely specific in their purpose to help borrowers eliminate credit card debt and live debt-free lives. As a result, the company puts a lot of resources towards that end. This occurs through a variety of tailored financial services, including direct counseling, a credit score updated monthly and a website full of picked-for-you articles.
Payoff is in the business of helping responsible borrowers move past the barriers their debt can create. Payoff doesn’t even like being called a loan company, but rather refers to itself as a business dedicated to “building a movement towards financial wellness by eliminating debt, saving money and reducing stress.”
Payoff Loan Comparison: Which Other Personal Loans Compete with Payoff?
Payoff is an incredibly focused, niche lender specifically seeking highly qualified borrowers looking for a single service: debt consolidation. If you don’t fit that profile, or want to research other options to meet those needs, there are several other personal loan options to consider.
A SoFi personal loan is another popular choice among highly qualified borrowers. Short for Social Finance, SoFi offers a boutique loan service that goes beyond money in the bank. Some SoFi customers consider the company more of an elite “club” of sorts that provides several perks such as Unemployment Protection and local events to attend. SoFi also offers some of the highest principal loan amounts online along with variable rates for added savings.
SoFi Personal Loan Details
- Principal Amount: $5,000–$100,000
- Interest Rate: 6.99%–14.87% fixed APR
- Terms: 3–7 years
- Time to Receive Funds: 3-5 business days
Known for its groundbreaking work in the peer-to-peer lending market, a Prosper personal loan is not funded by a bank or institution but rather by other individuals who are investing in your loan. Social lending is a great opportunity for borrowers with less-than-perfect credit but other points in their favor, such as a high income, to work their way out of debt or fund something important. Prosper asks borrowers to meet a minimum 640 credit score and then build an online profile to entice investors to fund their loan.
Prosper Personal Loan Details
- Principal Amount: $2,000 to $40,000
- Interest Rate: 6.95%–35.99% fixed APR
- Terms: 3 or 5 years
- Time to Receive Funds: 48 hours after funding is complete — can take up to 14 days
Earnest personal loans are similar to SoFi and Payoff in that they require borrowers of a higher caliber. Earnest specifically markets itself to borrowers with thin credit histories, portraying its loans as a means for borrowers to build their credit profiles. Earnest loans also have higher principal amounts compared to many online lenders.
Earnest Personal Loan Details
- Interest Rate: 6.99–18.24% fixed APR
- Principal Amount: $5,000–$75,000
- Loan Terms: 3, 4, or 5 years
- Time to Receive Funds: up to 1 week
If you’re in the market for a debt-consolidation loan, Payoff presents a viable personal loan option provided you have a relatively good credit score and meet the handful of other requirements that the company dictates. The lack of fees may be particularly appealing, but with interest rates on par with many of the loans available from other personal loan providers, your selection may be a matter of choosing the company with the principal amount that effectively meets your needs. As far as debt consolidation goes, it’s reassuring to know that Payoff has your back when it comes to tailored services that can help you meet your goals, which is the primary way in which it differs from other lenders.