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Payoff Personal Loans: 2022 Review

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Sulaiman Abdur-Rahman
Sulaiman Abdur-RahmanUpdated October 4, 2022

Overview of Payoff

The Payoff Loan™ is an unsecured personal loan that may help borrowers consolidate credit card debt balances. Powered by the fintech company Happy Money, Payoff Loans range from $5,000 to $40,000 and may include annual percentage rates between 5.99% and 24.99%. Terms can range from 24 to 60 months, but one drawback is that Payoff Loans may deduct an origination fee from your loan amount.The Takeaway: Payoff Loans may function as debt consolidation loans that can help borrowers pay off credit card balances. Payoff personal loans may be right for you if you’re burdened with thousands of dollars in high-interest credit card debt.

Pros and Cons of Payoff

Pros of Payoff

As highlighted in the Payoff reviews above, customers generally appreciate the pros of Payoff personal loans. The APR on a Payoff Loan can range from 5.99% to 24.99%, while the average interest rate on a credit card stood at 16.65% as of the second quarter of 2022. Checking your rate and seeing if you prequalify for a Payoff Loan generates a soft inquiry that doesn’t impact your credit score. These fixed-rate loans also don’t charge any late fees, annual fees, or prepayment penalties.

Cons of Payoff

Payoff personal loans may deduct an origination fee from your principal loan amount. A $10,000 Payoff Loan with a 5% origination fee, for example, would leave you with $9,500 of loan proceeds. Consumers with current delinquencies on their credit report may not qualify for a Payoff Loan.Serious delinquency rates for credit card account holders stood at 1.57% in the second quarter of 2022, according to TransUnion. Payoff Loans are mainly designed for the repayment of credit card balances, which may not help those who need to borrow for other reasons.

Payoff Personal Loan Terms, Rates, and Fees

Loan amounts: $5,000 to $40,000APR range: 5.99% to 24.99% Loan terms: 24 to 60 monthsPrepayment penalty: NoApplication fee: May charge an origination fee ranging from 0% to 5%Co-borrowers allowed: NoApproval speed: Several business days to get approved, several more days to receive funding Information accurate as of Sept. 23, 2022. 

Who May a Payoff Personal Loan Be Right For?

  • Consumers with more than $5,000 of high-interest credit card debt
  • Credit card users who want to diversify their mix of credit with an installment loan
  • Consumers who prefer a legitimate lending platform over a loan shark
  • Borrowers who want unsecured funding rather than collateralized personal loans

Who Payoff May Not Be Right For

 

What to Watch Out for With Payoff Personal Loans

  • The Payoff Loan does not charge late fees, but failing to pay and defaulting on a personal loan can have a major impact on your credit score
  • Happy Money reports its Payoff Loan customer account information to Equifax, Experian, and Transunion on a monthly basis
  • The minimum loan amount in some states may be more than $5,000

Payoff Personal Loan Eligibility Requirements

  • At least 18 years of age
  • Have a valid Social Security number
  • Have a valid checking account
  • Have a credit score of 640 or higher
  • Have no current delinquencies on your credit report
  • Reside in an eligible state (loans not offered in Massachusetts and Nevada)
  • Have at least three years of established credit history

Repayment Options for Payoff Personal Loans

Here are some Payoff Loan repayment options that may be available to customers:
  • Automatic payments
  • One-time manual payments online
  • Mailing a check payment

How to Apply for a Payoff Personal Loan

  • 1. Apply online: Applicants can get started by answering basic questions on a digital platform. You may check whether you have any prequalified loan options. Seeing your loan options won’t affect your credit score, but applying for one may trigger a hard inquiry that can cause your credit score to drop by several points.
  • 2. Verify information: Happy Money Inc., operator of the Payoff Loan platform, may request that you provide supporting documents for verification purposes, such as proof of identity. A driver’s license or passport may serve as proof of identity. Applicants may also need to provide proof of income and bank statements.
  • 3. Accept the loan: Approved applicants may sign and accept the loan offer at this stage. Borrowers may receive their personal loan proceeds within three to six business days. You can check your bank account to confirm receipt of the proceeds.

Alternatives to Payoff Personal Loans to Consider

As highlighted above, Payoff personal loans have several pros and cons. When you need to borrow money, it can be wise to compare lenders before submitting any loan applications. Here are some alternatives to Payoff personal loans that you may consider:
  • LightStream: LightStream offers personal loans ranging from $5,000 to $100,000 with no fees or penalties. Loan terms can range from 24 to 144 months depending on the purpose of the consumer loan, and the annual percentage rate may range from 4.49% to 20.49%. Applicants may receive funding within hours of applying, but one drawback with LightStream personal loans is the funds cannot be used to buy stocks or bonds.
  • Best Egg: Best Egg offers unsecured and secured personal loans ranging from $2,000 to $50,000. Best Egg personal loans have APRs ranging from 7.99% to 35.99%, and borrowers can choose three-year or five-year repayment terms. Approved applicants may receive funding within one to three business days, but Best Egg may deduct an origination fee of up to 8.99%.
  • Avant:Avant personal loans range from $2,000 to $35,000 and may have terms ranging from 12 to 60 months. APRs can range from 9.95% to 35.95%. Approved applicants can receive the funds within one business day, but borrowers may have to pay an administration fee of up to 4.75%.
  • Lantern: Lantern by SoFi can help you quickly find online personal loans ranging from $1,000 to $50,000. Just fill out one simple form to compare possible lending options and select a lender of your choice.

Frequently Asked Questions

Is it hard to get approved by Payoff for a loan?
What credit score do you need to get a loan from Payoff?
How long does Payoff take to approve you?

About the Author

Sulaiman Abdur-Rahman
Sulaiman Abdur-RahmanSulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and currently serves as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
Brand namesNo brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
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