Payoff Personal Loan Review

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If your high-interest credit card debt is hurting your ability to get ahead financially, it may be time to consider a debt consolidation loan that will allow you to simplify your debt into a single payment.

These types of loans make it possible to lower your interest rate, save money and boost your overall credit score. And in recent years, there have been a growing number of online-only companies offering a cheaper and more streamlined alternative to traditional bank loans.

Payoff is one company offering credit card consolidation loans with minimal fees, a transparent application process and flexible terms. The company promises to not only help consumers reduce their debt, but improve their overall credit score and financial situation.


There is something to be said for Payoff’s primary emphasis on credit card debt consolidation, as the company can focus on doing one thing and doing it well.

What is Payoff?

Payoff is a financial services company based in Costa Mesa, Calif. offering personal loans for people looking to consolidate credit card debt. It allows borrowers to essentially convert multiple revolving credit card balances into a single, fixed-rate installment loan.

The company markets itself as a simpler alternative to traditional banks, as it offers relatively low interest rates and minimal fees. Payoff offers loans of between $5,000 and $35,000 with interest rates that range from 5.65% (5.99% APR) to 22.59% (24.99% APR). (APR, or annual percentage rate, includes your interest rate and any fees.)

Some states may have higher minimum loan requirements, and it’s worth noting that with Payoff, any loan larger than $15,000 has a minimum APR of 6.99%.

Payoff loans are straightforward. If you are approved, your loan amount will be transferred to the bank account of your choosing, and you’ll be expected to pay the loan back, plus interest, by making monthly payments. Terms of Payoff loans range from two to five years.

Payoff is designed for credit card debt consolidation, but may be able to help with loans for other purposes. For example, Payoff is partnering with College Avenue Student Loans to join the list of companies that offer student loan consolidation.

Payoff says its goal is to not only help people reduce their credit card debt, but improve their FICO credit scores by as much as 40 points.

Payoff is a subsidiary of Happy Money, which also offers Joy, a mobile app that connects you with robot money coaches.

Major investors in the company include Huffington Post founder Arianna Huffington; Mohammed El-Erian, the former CEO of Pimco; and Deborah Kerr, the former CTO of FICO.

Who is Payoff For?

Payoff is geared toward people who are seeking to consolidate credit card debt, but still have reasonably good credit. It’s also a good option for people who are comfortable performing financial transactions online.

Payoff offers a refreshingly clear explanation of the criteria for being approved for a loan. The key factors are:

  • A FICO credit score of 640 or higher. (This is on the top end of what’s considered a “fair” credit score.)
  • A debt-to-income ratio of 50% or less. (Debt-to-income ratio is the percentage of your gross monthly income that goes toward paying off debt.)
  • Three years of good credit.
  • At least two open lines of credit in good standing, and no installment loans in the last 12 months.
  • No delinquencies of more than 90 days within the last 12 months.

Payoff loans are not offered in Massachusetts, Mississippi, Nebraska, Nevada or West Virginia.

The Application Process

You can get started with Payoff by clicking a link reading, “Check My Rate.” This takes you to a series of pages where you’ll enter in some required information. Payoff asks for the following details:

  • Your name.
  • Mailing address.
  • Mobile phone number (or landline if you don’t have one).
  • Personal gross annual income (not your household income).
  • Monthly mortgage or rent payment.
  • An email address and password.
  • Amount of credit card debt you want paid off.

Note: Checking for a rate is considered a “soft pull” of your credit report and has no impact on your credit score.

One you enter this information, you’ll be asked to formally apply for the loan, and that’s when you’ll say precisely how much you’ll be borrowing and how much time you want to have to pay it back.

The company claims that approval takes take three to seven business days, and you’ll need to wait another three to six days to receive your funds. Money is deposited into the checking account you provided during the application process.

While Payoff places a focus on credit card consolidation, it does not directly help pay off your credit cards. Instead, funds are deposited into your bank, and it’s up to you to use the money to pay the credit card companies.

Lending Partners

Payoff does not originate loans itself, but instead works with lending partners. There are currently four partners working with Payoff.

  • Alliant: The nation’s eighth-largest credit union, based in Chicago.
  • First Electronic Bank: A state-chartered bank based in Salt Lake City, Utah. Besides Payoff, it offers loans through other companies including Blipay, Fundbox, Personify and Genesis Financial Solutions.
  • First Tech Federal Credit Union: Credit union based in Beaverton, Oregon offering 40 branches in the Pacific Northwest.
  • TechCU Technology Credit Union: A small credit union based in Silicon Valley.

Interest Rates and Terms

As stated above, Payoff offers loans of between $5,000 and $35,000 with terms between two and five years. Interest rates range from 5.65% (5.99% APR) to 22.59% (24.99% APR).

The rate you receive depends on your credit score and credit history. In general, Payoff’s rates appear to be lower than most banks’. notes that 5.99% is among the lowest rate offered anywhere, rivaled only by those from SoFi, BestEgg, Barclays and Freedom Plus.

A Payoff Loan Example

To demonstrate how the Payoff loan works, let’s say I am approved for a loan of $15,000, to be paid back over four years. And let’s say (due to my good credit!) I get an APR of 7%. Based on these conditions, I will be required to make a monthly payment of $359.19 each month. Over the four years, I’ll pay the $15,000 of principal, plus $2,241.30 in interest.

If I were to shorten the term to three years, my payment would be $463.16, or more than $100 higher. However, I’d end up paying only $1,673 in interest, for a total savings of nearly $600.

Paying Your Loan

Making monthly payments on your Payoff loan is fairly straightforward. You can set up automatic payments and have the money withdrawn from your checking account. Or, you can pay by check. You can check the balance of your loan at any time on the Payoff website.

The website will also allow you to make extra payments. If you make an extra payment via check, you must specify it as such on the memo portion of the check.

Payoff suggests that if you want to pay your loan off in full, you reach out to them directly in order to get the most up-to-date loan information. If you want to change the due date of your monthly payment, you can, but only once in a 12 month period.

Payoff does not offer a smartphone app, though your account can be accessed via a mobile version of the website.

Personal Assistance

One of the unique things about Payoff is that it offers a team of people to guide you in not only paying off your loan but getting fully out of debt. The company has a Member Experience Team that will call you when you initially receive your loan, then check in on a quarterly basis. These team members will give you guidance on which credit cards to pay off first, and offer tips on improving your overall personal finances.

When you get a loan through Payoff, you will be provided a series of quizzes to assess your financial health and habits. These quizzes are supposedly guided by science and will be used by Payoff employees to tailor their advice and help you form a plan to pay off your loan and ultimately boost your credit score.

Payoff also may offer job loss support, but stops short of promising it will suspend your payments if you become unemployed. “We understand things happen,” Payoff says on its website. “If you lose your job, just let us know. We’ll work with you on your payments.” This is in contrast to one key competitor, SoFi, which will suspend monthly payment requirements for up to 12 months if you lose your job through no fault of your own.


One of Payoff’s biggest selling points is its lack of fees compared to most lenders. The company has eliminated all fees, except for an origination fee of between 0% and 5% depending on the loan and borrower. You would pay this fee once, when your loan is issued.

With Payoff, there is no prepayment penalty, no application fee, no late fees, no check processing fee, and no annual fee.

But there is some fine print to note here. Payoff specifically states that it has combined the origination fee and loan maintenance fee into one. This is important, because a typical origination fee is between 0.5% and 1%.

Thus, Payoff’s “origination” fee could be quite a bit higher than other lenders’. Combining fees into one may be convenient for you as a borrower, but it’s not necessarily going to save you money.

Impact on Your FICO Credit Score

No company can guarantee that it will improve your credit score. But Payoff claims that it has seen success in boosting FICO Credit scores among its borrowers, though individual experiences will vary.

The company says that members who use a Payoff loan to eliminate at least $5,000 of credit card balances see an average credit score increase of 40 points within four months of receiving the loan. Payoff bases this claim on a study of members between August 2017 and February 2018.

With Payoff, you are replacing revolving debt from credit cards with an installment loan. By itself, this won’t make much difference to your credit score. With either credit cards or an installment loan, the most important thing is to make payments on time.

However, with an installment loan, the payments are fixed. Debt from credit cards, on the other hand, can rise and fall depending on what you spend. And with credit cards, if you use too much of your available credit, you could see your credit score drop.

Late Payments

While Payoff does not charge late fees for tardy payments, this does not mean that there is no consequence to failing to pay your bill on time. Loans will still continue to accrue interest if payments are not made, and missing payments entirely could result in a default of your loan. This would be harmful to your credit.

If you do find yourself unable to make a payment on time, a Payoff team member could offer guidance and help create a plan for you to get back on track.

Customer Service

Payoff is an online-only company, so there’s no way to speak to a customer service representative in person. However, you can talk with a human being by phone, chat or email. Phone customer service is available from 8 a.m. to 5 p.m. Pacific Time by calling 1-800-878-0901. Email support is available through [email protected]

Privacy and Security

Payoff uses 256-bit encryption on all its transactions. It utilizes security solutions from McAfee Secure, and deploys security experts to conduct vulnerability assessments and periodic reviews.

Payoff says it uses cookies to track your visits to its website.

By signing on with Payoff, you will have to share some of your personal information. There’s no way around this. In itsprivacy policy, the company notes that it can collect the following:

  • Name, address, phone number and email address.
  • Financial accounts.
  • Personal preferences, such as the related services you use.
  • Specific demographic information such as age and gender.
  • Information on how you use the products and services offered.
  • Credit reference information, including Social Security number, income, and employment status
  • Information from social networking sites, which it claims it may use to “individualize your experience.”

Payoff says it reserves the right to contact you with solicitations for products and services, including “without limitation, notification of offers, coupons, newsletters, and other communications.”

Risks of Debt Consolidation Loans

Any loan comes with risk. A debt consolidation loan can make your life easier by reducing many payments into one, and potentially lowering monthly payments. But it’s still a new loan with terms and conditions that you need to abide by.

First, you must understand that when you apply for a debt consolidation loan, it triggers a hard pull of your credit report, which could result in a lower credit score.

Second, it’s important to pay attention to the length of the term on the consolidation loan. A company may entice you by showing you how it can lower monthly payments, without you realizing that the loan is simply spread out over a longer period of time. Remember that the longer the loan, the more interest you will end up paying.

Another crucial thing to consider is that a debt consolidation loan, by itself, may not solve the underlying problems that led you into credit card to begin with. Are you still spending more than you are earning? Continuing to make just the minimum payments on credit cards? Are you still purchasing items you don’t need? Are you taking time to track spending and create budgets?

If you continue racking up new credit card debt, a debt consolidation loan could only add to your debt. You could end up worse off than when you started.

Competitors to Consider

There are a number of other companies that offer services similar to Payoff’s.

  • SoFi: Online-only lender offering personal loans with terms as long as seven years and an APR of as low as 5.99%. SoFi personal loans have no fees.
  • Upstart: Offering three- and five-year loans of between $1,000 and $50,000 with APRs ranging from 7.54% to 35.99%.
  • BestEgg: Another online lender offering an APR as low as 5.99%. It offers the ability to get loan money within as little as a day. To qualify for the lowest rate, you’ll need an income of at least $100,000 and credit score above 700.
  • Marcus By Goldman Sachs: Offers no-fee, fixed-rate loans of between $3,500 and $40,000. APRs range from 5.99% to 28.99% with loan terms of three to six years.
  • Discover Personal Loans: From the same company as Discover credit cards, offering personal loans of up to $35,000 with no fees. Offers fixed rates with APRs between 6.99% and 24.99%.
  • LendingClub: A leading peer-to-peer lender that allows you to bypass a traditional bank and borrow from individuals who view your debt as an investment. You can borrow up to $40,000 with LendingClub and your APR may as low as 6.95%.
  • Prosper: Another peer-to-peer lender offering APRs of 6.95% to 35.99% on loans of up to $40,000. Prosper says it will soon offer home equity lines of credit.

One other alternative to Payoff is to examine a balance transfer credit card. Many credit cards allow you to transfer the balance of your other credit cards and pay no interest for a set time period, up to 21 months. This could save you money in interest, but could be risky if you don’t have your balance paid off before the promotional period ends, as the interest rate after that could be high.

Pros of Payoff

If you have a sizable amount of high-interest debt, you may be able to save money through a Payoff loan. Payoff’s interest rates are among the best in the nation, and the company offers a support team to help you not only pay off your loan but improve your finances overall.

Some other positives:

  • Easy application process.
  • Clean website interface.
  • No fees for early prepayment, maintenance or late payment.
  • Loans are unsecured, meaning that you don’t have to put up your house or other assets as collateral.

Cons of Payoff

Payoff isn’t for everyone. For one thing, it is designed for credit card debt consolidation only. If you have other kinds of debt, you might not be able to benefit from a Payoff loan.

In addition, as Payoff is an online-only lender, you must be comfortable with the idea of borrowing from an institution with no brick-and-mortar locations.

Perhaps most crucially, Payoff tends to lend only to those with good credit scores. People with poor credit, or even good credit but a limited history, may not be qualify for a loan. This creates a paradoxical situation; those with high levels of credit card debt might benefit most from a consolidation loan through Payoff, but their debt levels may be the precise reason they could be turned down.

Other drawbacks:

  • No dedicated mobile app.
  • Higher minimum interest rates on loans of $15,000 or more.
  • Fewer loan term options than some competitors.
  • High origination fee.
  • No formal unemployment protection.

The Bottom Line

There are many online personal loan companies out there with similar rates and services, so it’s hard to unequivocally declare Payoff better or worse than any other.

But, Payoff is a simple solution for those with good credit scores who are nonetheless burdened by high levels of credit card debt. Its rates are competitive, and it is unique in its ability to offer one-on-one personal finance counseling.

There is something to be said for Payoff’s primary emphasis on credit card debt consolidation, as the company can focus on doing one thing and doing it well. This focus also offers the potential for customers to actually reduce their debt level instead of increase it. Remember, of course, that it all comes down to you and your commitment to eliminating debt through smart financial choices.

Have you used Payoff to consolidate your credit card debt? Would you consider using it to help reduce your overall debt load? Let us know in a comment below.


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