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Payoff Debt Consolidation Loans: 2021 Review

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Susan Guillory

Susan Guillory

Updated April 14, 2021

Overview of Payoff

If you’re struggling to pay down balances on multiple credit cards, a Payoff debt consolidation loan may help. A Payoff unsecured personal loan can consolidate balances on multiple cards—offered in amounts between from $5,000 to $40,000, creating one monthly payment and interest rate. Payoff loans are unsecured and, consequently, do not require borrowers to use personal assets as collateral. 
Pros and cons

Pros

  • Competitive rates
  • No application, late, or prepayment fees
  • Local Member Advocates help you on your financial wellness path

Cons

  • Origination fee of 0-5%
  • Applications with delinquencies not approved
  • Loans are mainly designed for the repayment of credit card balances

Payoff Debt Consolidation Loan Terms, Rates, and Fees

Loan amounts: $5,000-40,000APR range: 5.99-24.99% (Updated as of 6/21/2021.)Origination fee: Typically 0-5%Minimum credit score: 640 FICO®Time to funding: typically 3-6 business daysCo-borrower needed: No (Updated as of 4/9/2021.)

Other Lenders

Be sure to compare personal loan rates with multiple lenders before choosing a loan. Below are some comparable lenders to Payoff that may be worth researching:

What Types of Loans Does Payoff Offer?

Payoff specializes in credit card debt consolidation loans. For those who have balances on multiple credit cards, each with different high interest rates, this type of loan can help eligible borrowers to pay off outstanding balances—by creating a new loan with one monthly payment and fixed interest rate.Payoff claims on its site that borrowers who paid off at least $5,000 in credit card balances with a Payoff loan saw an average FICO® credit score increase of as much as 40 points within four months. These individual results are not guaranteed, and are based on a 2019 study of an unspecified number of borrowers, so it’s likely wise to take that claim with a grain of salt.

Important to Keep in Mind

It’s worth noting here that Payoff loans come with an origination fee of between 0% and 5% of the total loan value. Borrowers who take out a $40,000 loan could pay as much as $2,000 in origination fees. Payoff charges the origination fee only once, when the loan first gets issued. Payoff debt consolidation loans’ interest rates range from 5.99% to 24.99% APR. Applicants with a stronger financial history may qualify for the lower competitive rates. The higher rate may be similar to what you’re paying on your credit cards, so there might be minimal benefit to taking out a Payoff loan in that case. Payoff loans come with fixed interest rates, however, while revolving credit often use variable rates. 

Applying for a Payoff Debt Consolidation Loan

The application for a Payoff loan is simple, and takes just a few minutes.

Payoff Loan Requirements

To potentially qualify for a debt consolidation loan through Payoff, the requirements are fairly straightforward.Applicants must have a FICO® credit score of 640 or higher and no current delinquencies. Payoff will also look at your:
  • Debt-to-income ratio
  • Age of credit history
  • Open and satisfactory trades
  • Credit utilization
If you’re unfamiliar with lending terms, “open and satisfactory trades” include lines of credit that the applicant has opened and made on-time payments with. 

The Application Process for a Payoff Loan

The application process for a Payoff loan is simple. You’ll be asked for your contact information, your income, and how much you pay in rent or mortgage each month.You may also be asked for additional documentation, including a state-issued ID, two most recent pay stubs (or your most recent 1040 tax document if you are self employed), and your most recent bank statement. If additional information is needed, Payoff will let the applicant know. If approved, you will be given terms to choose from. Your funds to pay off your credit cards will be electronically deposited into your account within three to six business days.

The Bottom Line

If you’re struggling with credit card debt, multiple monthly payments, and high interest rates, a Payoff unsecured personal loan may simplify your debt repayment. For some applicants, a consolidation loan could lower the amount paid each month towards interest. For others, the qualifying rate may be similar or the same to what they presently pay on credit cards so it may not be worth it. Because Payoff consolidation loan rates can range from 5.99% to 24.99% depending on the applicant, this type of loan may be especially helpful for borrowers who currently pay more in interest on credit cards than what they’d pay with a Payoff loan APR. Looking for more personal loan options? With Lantern's help, you can find the right one for you.

Frequently Asked Questions

How long does it take to get funds from an approved Payoff loan?
Does checking rates with Payoff hurt credit?
Can you pay off a Payoff loan early?
Does Payoff check credit?
How does Payoff verify income?
How does a Payoff loan work?
What credit score do you need for Payoff?

About the Author

Susan Guillory

Susan Guillory

Susan Guillory is the president of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and has been published on sites including Forbes, AllBusiness, and Cision. She enjoys writing about business and personal credit, financial strategies, loans, and credit cards. Follow her on Twitter @eggmarketing.
External WebsitesThe information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Credit improvementMany factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit (https://www.consumer.ftc.gov/topics/credit-and-loans)
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