Founded in 2009, Payoff's initial business model incorporated gamification, behavioral science, and social media to help people manage and pay down credit card debt. Pivoting in 2014, Payoff entered the lending space to help people eliminate high-interest credit card balances.
The company offers the Payoff Loan, a specialized loan product which can only be used for credit card debt consolidation, helping borrowers secure their financial wellness by simplifying credit card payments into one monthly payment.
Payoff Rates & Terms
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Generally, personal loan lenders offer interest rates ranging up to 35.99 percent. Payoff offers fixed interest rates ranging from 5.99 to 24.99 percent. This range is average for the industry, but Payoff's maximum interest rate is much lower than many competing lenders.
Because Payoff's maximum rate is quite low, it may be difficult to qualify for a Payoff loan, especially if you have less-than-perfect credit.
Payoff does not charge the following fees, many of which are common in the personal loan industry:
While the company doesn't charge these fees, Payoff does charge an origination fee and non-sufficient funds fee.
Everyone with an approved application will also be connected with a Payoff member advocate. Member advocates are available to guide people through their Payoff journey — they inquire about your goals, dreams, and challenges so they can better help you reach success — and they will check in with you quarterly by phone to see if you have any questions and/or concerns about your Payoff personal loan.
In addition to providing a credit card debt consolidation loan product, Payoff provides customers with a variety of educational tools so that they can stay informed and build habits that will increase their financial health.
A Payoff personal loan can only be used for credit card debt consolidation. If you need a personal loan for any other reason of expense, you will need to look into other personal loan lender options.
Payoff does not charge a formal closing fee, which is a portion of the loan amount deducted from the total loan amount before disbursement. Instead, Payoff combines the origination fee, closing fee, and the maintenance fee into one, comprehensive origination fee.
The origination fee covers all services and constitutes the difference between the interest rate and the effective APR. It ranges between 0 and 5 percent, dependent on the request and length of the loan.
Payoff also charges a $15 returned payment fee in the event that there isn't enough money in the customer's account to make the payment.
If you would like to avoid even these fees, there are some personal loan lenders that don't charge an origination fee or non-sufficient funds fee.
To be eligible for a Payoff loan, you must have a credit score of at least 640. This is a much higher requirement than you might see with other lenders — many lenders have minimum credit score requirements as low as 600, or even 580.
However, because Payoff specializes in credit card debt consolidation, this high requirement makes sense because they could be taking a larger financial risk on borrowers. Therefore, if you would like to qualify for a Payoff loan, you should ensure that your current credit score is in good standing (a score of at least 700 is always good to aim for), and that you have a good credit history, demonstrating to Payoff that you are a reliable borrower that can and will be able to make your payments.
Payoff does not accept joint applications or cosigners.
Payoff's products and services are not available in the following states:
Approval of loan applications and funding availability is another area where Payoff falls short when compared to its competition. Payoff has a policy stating that personal loan applications will be either approved or rejected within two to three business days from the time they were submitted. Although this is not an extremely long time, it is somewhat slow considering that most other companies in the industry provide same day approval to their customers.
In total, it can take up to five business days for customers to receive funds, which is a long time to wait for customers who are in need of immediate funding. However, as Payoff states, its mission and purpose is not to provide customers with emergency funds but instead to be a solution for high-interest credit card debt.