Payoff Personal Loan Review

Payoff personal loan rates may be lower than credit card interest rates

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If you’re looking to pay off or lower your credit card debt, one of the smartest money moves you can make is to consolidate that debt for a lower rate with a personal loan. Payoff—which is not a bank but a “financial wellness company” that works with lending partners to originate loans—is among the top lenders out there for this specific purpose, but it may not be a good fit for everyone. Learn whether a Payoff personal loan is right for you.

  • APR Range 5.99% to 24.99%
  • Recommended Minimum Credit Score 640
  • Loan Amounts $5,000 to $40,000
  • Loan Terms Two to five years
  • Pros and Cons
  • Fees
Pros and Cons
Pros
  • Very few fees

  • Competitive rates

  • Holistic approach to managing money

  • Free FICO score updates

Cons
  • Not available in all states

  • May come with an origination fee

  • No options to have a co-signer

  • Delinquencies may prevent qualification

  • Generally only good for paying off credit card debt

Fees
  • Origination fee: 0% to 5% of the total amount borrowed

Pros of Payoff Loans

  • Very few fees: Payoff doesn’t charge late fees, application fees, or prepayment penalties. In fact, the only fee it does charge is an up-front origination fee.  
  • Competitive rates: Payoff charges competitive interest rates, especially for well-qualified borrowers. Its rates are in line with other lenders, such as BestEgg and SoFi, and lower than big bank lenders like Marcus, TD Bank, or Discover.
  • Holistic money approach: Payoff offers support through tools and assessments to look at your larger money picture, including how your stress and personality affect your finances. It also offers quarterly check-ins by phone during your first year.  
  • Free FICO score updates: You’ll get a free update on your FICO score every month. Payoff claims that its users see an average increase of 40 points to their credit score within the first four months, so this perk is a helpful way to monitor your own progress. Remember, though, there are many factors that influence your score, so the way it works for you may vary.

Cons of Payoff Loans

  • Not available in all states: Currently, Payoff personal loans are not available in Massachusetts, Mississippi, Nebraska, Nevada, and West Virginia.
  • May come with an origination fee: Payoff personal loans come with an origination fee of 0% to 5%. Aside from the interest you’ll be charged, it’s the only way that Payoff itself earns money from your loan. 
  • No options for having a co-signer: You’ll need to apply for a Payoff personal loan based on your own creditworthiness and qualifications because it does not allow you to apply with a co-signer. So if your credit score needs work, there may be better options for borrowing. 
  • Delinquencies may prevent qualification: If you’re currently behind on any of your bills, Payoff recommends not applying for its personal loan until you are all caught up. 
  • Generally only good for paying off credit card debt: Similarly, except in some rare cases, Payoff loans can only be used for one purpose—to pay off credit card debt that’s listed in your own name. That’s inconvenient if, for example, your partner also has their own credit card debt and you’d like to consolidate it all into one loan. With Payoff, you’ll each need individual loans. 

Payoff Personal Loan Rates & Terms

If you’re looking for competitive rates on your credit card debt consolidation, Payoff is one of your best bets. It offers fixed annual percentage rates (APR) ranging from 5.99% to 24.99%, with term lengths of two to five years. 

The exact rate Payoff offers you will depend on a few factors, including:

  • What state you live in
  • Your credit score and credit history
  • Which loan term length you choose
  • How much money you’re borrowing

While Payoff generally charges a minimum APR of 5.99%, that’s only for loans under $15,000. If you borrow more than that, the rate may only be as low as 6.99% APR. 

How Much Can You Borrow With Payoff?

Payoff loan amounts range from $5,000 to $40,000. A couple of states have slightly higher minimum loan amounts. You must borrow at least $5,100 in New Mexico, and $6,100 in Maryland. 

Payoff Personal Loan Fees

Payoff’s personal loan fees are a bit of a yin-and-yang situation. On one hand, it charges an origination fee of 0% to 5%. If you don’t want to pay that, there are other lenders that skip this fee. But on the other hand, it doesn’t charge any other fees that you might commonly see, such as late fees or prepayment fees. 

The best way to see whether you’d save money with a Payoff personal loan is by running the numbers. Make sure to check your rates and fees with other lenders, too. Then, plug them into a consolidation calculator to clearly see which options will save you the most money—whether that’s with Payoff or not.  

How to Get a Personal Loan From Payoff

Payoff’s application process is similar to most other online lenders you’ll see. You’ll start by filling out the prequalification form with your personal details. Not all lenders off prequalification, and it’s a great way to check what rates and loan options are available to you because Payoff will run only a soft credit check that won’t affect your score. If you like the loan terms offered, you can proceed with the full application and the hard credit check. 

You should meet a few of these requirements, as well:

  • A credit score of at least 640, and would like to boost it higher
  • At least three years of established credit
  • You aren't delinquent on any payments

If you are approved, Payoff provides funding to your account via direct deposit within three to six business days. Once you have the funds, you can use them to start paying down your debt.

Payoff’s funding time to your account may be a bit slower than other lenders, some of which may offer same-day funding. This is because a Payoff personal loan isn’t meant for quick purchases or emergencies. Instead, it’s meant to help borrowers consolidate and pay off debt.

Final Verdict

Payoff may be a good option if you’re looking to pay down high-interest credit card debt. It simply offers competitive rates that may be lower than your credit card rate. And aside from the origination fee, its fee structure is quite fair as well. The company also exudes positivity in trying to help you better your finances, paying more than just lip service to this idea with lending design and active customer support.

However, if you can qualify for a similar or lower rate elsewhere—especially somewhere without an origination fee and the ability to add a co-signer if needed—you may be better off with another lender. Payoff also seems somewhat exclusive: It may be difficult for people with credit scores under 640 and those overcoming financial challenges, such as delinquencies, to qualify. But if you are approved, Payoff may be one of your best bets to paying down your debt.

Article Sources

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  3. Payoff. "Should I Include my Spouse or Partner's Income When Filling Out the Payoff Loan Application?" Accessed June 9, 2020.

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  5. Payoff. "Payoff Loan Approval Criteria." Accessed June 9, 2020.

  6. Payoff. "After Approval, How Quickly Does Payoff Fund My Payoff Loan?" Accessed June 9, 2020.