Payoff Loans is a debt payoff solution specifically for high-interest credit card payoff loans for bad credit borrowers
I’ve been using and reviewing personal loan sites since destroying my credit in 2009 and have seen a lot of changes since then. One of the biggest changes has been the trend to focus sites, loan providers specialized in one service for a specific type of customer.
By focusing on one type of loan and one type of customer, these new loan websites can provide a better service at a lower price than others trying to be all things to all people.
That’s exactly what I found when I reached out to Payoff Loans customers to review the website, a loan provider specializing only in credit card payoff loans for bad credit borrowers.
That narrow focus means it can provide some unique services that go beyond other online lenders.
Pros of Payoff Loans for Credit Card Debt
- Lower origination fees for short-term loans
- Excellent customer service with a dedicated specialist to track your progress
- Lower rates compared to other bad credit loan sites
- No late fees or hidden fees
Cons of Using Payoff Loans for Credit Card Debt
- Loans are only available for credit card debt consolidation
- Payoff may approve less money than requested to lower your payment
What is Payoff Loans?
Payoff Loans has a special mission statement that separates it from other online loan sites. The company believes that the first step to financial wellness is taking control of your credit card debt. It helps do this by providing loans specifically for that purpose and for any type of borrower, including bad credit.
Because of this special focus, Payoff Loans is able to streamline the loan process and offers some of the lowest credit card debt payoff rates I’ve seen.
Loans are available from $5,000 to $35,000 on terms of up to five years. Rates range from 6% to 25% on an annualized basis, well under the 36% interest rate cap you’ll find on most bad credit loan sites.
Payoff charges just one fee on its loans, an origination fee of up to 5% when your loan is approved. There are no late fees, check processing fees or application fees like you find on other sites.
One of the most unique services offered by Payoff Loans is the ‘Member Advocate’ you’ll be assigned after getting your loan. These are somewhere between customer service specialists and financial advisors that provide ongoing support on keeping your finances on track. The advocates work directly with you through the tools on the website to help pay off your loan and manage your finances.
How Does Payoff Loans Work for Credit Card Debt Consolidation?
While Payoff Loans is supposed to be exclusively for paying off high-interest credit card debt, there’s really no verification process to make sure you use the money for consolidation. Like any type of personal loan, you’re free to use the money any way you need.
That said, it’s important that you take the opportunity to pay off your credit card debt with your payoff loan. The website and staff of Member Advocates knows what they’re doing and can help you get your finances back on track but you have to use the process for its purpose.
Paying off your high-interest debt is not only going to lower your monthly payments but will also save you thousands in interest charges. That’s going to free up money in your budget to pay off your debt faster and with less stress.
Not only can Payoff Loans help save you money on your loans, it can also help raise your credit score so future loans are at lower rates. A survey of Payoff Loan borrowers that paid off more than $5,000 in credit card debt say their FICO score increase 40 points within four months of their loan.
Payoff Loans Customer Reviews
Payoff Loans has received a 5-star rating from Lending Tree and 4.7-stars out of 5 from Credit Karma for its customer service and unique mission. Most of the customer reviews point to excellent customer service from Member Advocates and an easy application process.
A few of the bad reviews for Payoff Loans points to the company’s policy of counter-offers to loan applications. In some cases, if you are asking to borrow more than your credit card debt balances, Payoff Loans will approve only enough to pay off your credit cards.
For example, if you apply for a $35,000 loan but only have $10,000 in credit card debt, customer service is going to call you and recommend you only borrow up to $15,000 or less.
Payoff isn’t like other installment loan websites that will loan you as much as possible and really don’t care what you do with it. Payoff wants you to pay off those credit cards and get your debt under control. If you’re just looking to borrow money to go shopping, Payoff isn’t for you.
While getting approved for less than you applied might be frustrating for some people, understand that credit card debt payoff is the company’s mission. To keep with that mission and help people manage their debt, you may only be approved for as much as you need for this purpose.
There are a few other Payoff Loans complaints from borrowers that clearly didn’t qualify for the loans, borrowers that were already seriously behind on other debt. This isn’t necessarily the company’s fault. To offer the lowest rates possible to everyone, it has to restrict loans to those with the ability to repay.
Payoff Loans Fees
Payoff Loans charges just one fee on its loans, an origination fee of up to 5% on proceeds. The fee depends on the term of your loan from 2% on two-year loans to 5% for loans with payoff of five years.
That means if you borrow $10,000 on a three-year loan to pay off your credit card debt, the origination fee will be $300 on your loan. You’ll get the $10,000 deposited in your bank account and the $300 will be added to the amount you repay.
Even after the origination fee, using a Payoff Loan for credit card consolidation can save you thousands. Paying off the loan above, assuming a 14% interest rate versus 24% on your credit card debt, would save you over $1,450 in interest over the three years.
That’s an extra $40 a month you can put to debt payoff or just to make room in your budget.
There are no other fees for Payoff Loans. There are no application fees, prepayment penalties or processing fees. Borrowers don’t even pay a late fee if they can’t make a payment. They work with their Member Advocate to get back on a payment plan that fits their budget.
Applying for a Payoff Loan for High-Interest Credit Card Debt
Applying for a credit card payoff loan is straight-forward and takes about three minutes. You’ll need personal information like date-of-birth, social security number and employment information to create an account.
Payoff Loans will do a soft-pull of your credit to pre-approve your loan and estimate your interest rate. This doesn’t affect your credit score and you’ll be able to see your loan payoff terms before you accept the loan.
Payoff Loans is the most transparent lender I’ve seen in its application process. The lender details every requirement to get a loan for credit card debt payoff.
To get approved on Payoff Loans, you need:
- A FICO credit score of 640 or higher
- Debt-to-Income ratio of 50% or less
- At least three years of credit history
- No more than one installment loan in the last year
- No credit delinquencies greater than 90 days in the last year
This might seem like a lot of requirements but all online lenders are looking for these points, they just don’t list them out in the application process. Most of the Payoff Loans requirements are fairly low compared to others.
A debt-to-income ratio of 50% or less means your total debt payments each month cannot be more than half your income. For most people, this ratio is closer to 30% of their income.
Most people 20 years or older will have at least three years of credit history. This is just the amount of time from your first credit account. The requirement for no credit delinquencies greater than 90 days is probably the strictest, meaning you can’t have been more than three months’ late on a debt in the last year.
If you accept the loan, money is usually deposited in your bank account within a day. Monthly payments on the loan are fixed and start after about a month. You have the option to defer or skip a payment if you run into trouble and your Member Advocate will help design a repayment plan that fits your budget.
Get Out from High-Interest Credit Cards, Check Your Rate on a Payoff Loan – Approval in Less than 5 Minutes
Payoff Loans is a specialized online loan site for bad credit borrowers to provide credit card debt consolidation loans. This focus allows the website to offer loans at lower rates and additional services compared to other installment loan lenders. The company’s transparency with fees and the application process makes it one of my most recommended loan sites for credit card payoff.