Payoff is unique in that they want to help you conquer your credit card debt by offering personal loans from $5,000 to $25,000 to repay your high interest debt quickly. Founded by Scott Saunders, the purpose behind Payoff is to bring a human touch back to financial services by supplying relatable products and advice.
If you have high interest credit card debt, you know how difficult it can be to keep up with the steep interest charges applied. Further, if you struggle to pay off your balance each month the amount owed will balloon over time due to the high rates charged. This can lead to a lower credit score as the interest rates grow your balance thus leveraging more of your available credit.
Payoff gives you the opportunity to take control of your credit card debt. With great rates and short repayment terms, you can build a healthy financial future by paying off your debt quicker and saving substantially on future interest charges.
Payoff Loan Basics
To qualify for a Payoff loan, you need to have a minimum credit score of 660. Their minimum score is higher than both Prosper and NetCredit. At the same time, Payoff charges low interest rates on its loans, ranging from 8.00% APR to 22.00% APR. Considering that Prosper charges up to 36.00% APR, it makes Payoff a better option. They also have loan repayment terms that stretch as far as five years to give you ample time to repay your credit card debt.
It's important to note that at this time they only have loans for the purpose of paying off your credit card debt. This means if you want a personal loan for other items such as automobile financing or funds for home improvement projects, then it is best to go with another lender.
Payoff makes it simple and risk free to apply on its website. You can fill out the short application form in a few minutes and receive an instant decision. What makes Payoff such a great option is they do a soft pull on your credit score, so you won't have to worry about your score lowering as a result of applying for a loan.
If you receive approval, Payoff will provide you with a variety of offers from which you can choose the best one that aligns with your finances. After this, you'll need to supply them with the verification information they request.
Once they finalize the application process, you'll receive your loan funds via direct deposit into your bank account normally within two to five business days. You can use these funds to pay off your credit card balances. Additionally, you can use the same bank account to repay the loan with Payoff through automatic payments.
Payoff doesn't charge late fees or prepayment penalties, which is where you pay off the loan quicker than its term. This makes them a less expensive option than other lenders who do assess those fees. However, they do charge an origination fee of two to five percent, depending on your loan's repayment term.
Payoff does have a few qualification requirements you must meet to receive loan approval. Here is a look at them:
You must have a minimum credit score of 660. If you don't receive approval due to a lower score, Payoff gives you access to its Lift program. This is an excellent program where you will receive expert tips on improving your credit score.
You also need three years of credit history to receive approval.
Your debt to income ratio should also be less than 50 percent. This ratio measures how much of your monthly income goes to your debt obligations such as credit cards, car loans and a mortgage.
Your state of residence will also influence if you qualify. Currently, Payoff does not offer loans in the following states: Alabama, Colorado, Connecticut, Delaware, Iowa, Illinois, Indiana, Kansas, Louisiana, Massachusetts, Minnesota, New Hampshire, New Jersey, Pennsylvania, South Dakota, Texas, Vermont and Wyoming.
Benefits of Using Payoff
Payoff designs its loans to help you better manage your finances and achieve your goals such as paying off credit cards quickly. This means if you want to consolidate multiple credit cards to pay them off faster, Payoff's loans are an excellent option to consider because they have lower interest rates to help you do this. This approach also makes repaying debt easier since you are making one payment monthly instead of multiple.
Payoff's Customer Service
A focal point of Payoff's business strategy is to serve its customers with exceptional customer service. Payoff currently has an A+ rating with the Better Business Bureau in part because of the great service they offer. They have multiple ways in which you can contact them with any questions you might have including live chat, email and phone.
Educational Resources Payoff Offers
One area where Payoff is an industry leader in is the educational resources they offer you. The Lift Program is a comprehensive education tool you can use to better manage debt, develop effective repayment solutions and improve your credit score by employing practical tips from financial experts.
Another excellent resource you should take advantage of is Payoff's financial blog. This blog is all-encompassing in topics covered, making it a great place to turn if you need advice on investing, paying off credit card debt or even starting a business. Their blog posts are easy to read and contain helpful information you can use to plan your financial future. They tackle both the simple and the complex topics to help you gain more financial literacy.
Things to Consider for Payoff
Payoff is an excellent way to pay down your credit cards quickly. While they have tighter credit standards than other lenders like Prosper, they keep their rates low, making them an affordable option to consider if you qualify. Even if you don't have a high enough credit score right now, you can use their education resources to discover more effective ways to better manage your finances.
Verdict - Very Good
Payoff is an ideal lender if you are looking to take down your credit card debt because its loans are specifically tailored for that purpose. If you are looking for a loan for another purpose, you should consider other lenders, but with educational tools, decent APR rates and personalized guidance, Payoff is a solid choice.