Are you currently in a position where you have accumulated debts on one or more credit cards? If so, interest rates can be crippling. Not only this, but trying to manage refunds on multiple credit cards can be a daunting task, especially if the repayment dates are scattered throughout the month.
If this sounds like you, then you may want to consider Payoff.
In a nutshell, Payoff specializes in one service and one service: paying credit card debt. If you are thinking of using Payoff for this purpose, we suggest you read our full review.
We've covered everything, from how Payoff works, how are your rates and if you are likely to qualify or not. By reading our review in its entirety, you will be aware of whether or not Payoff is the right lender for your individual needs.
Let's start exploring what Payoff really is.
Who is Payoff and what do they do?
Credit card debt is a major problem in the US. UU. In fact, according to the Federal Reserve, it is estimated that the credit card debt in the US. UU. It exceeded $ 1 billion in 2019, compared to $ 854 billion just five years earlier.
With about 60% of Americans maintaining a credit card balance that exceeds accessibility levels, this not only results in high interest payments, but also an unfavorable credit score.
In response to the increasing levels of credit card debts, Payoff was launched in 2009. The California-based company specializes in paying credit card debts on behalf of its customers, which then becomes an agreement to Loan between the debtor and Payoff.
The financial services company claims to have more than 11,000 clients, representing a total of $ 175 million in credit card debts.
In terms of the settlement process itself, Payoff has partnered with the white-label banking provider First Electronic Bank to facilitate its loans. Once a loan is approved, Payoff proceeds to settle the client's outstanding credit cards. The debtor must pay the reimbursement, according to the terms of the agreement that was offered during the application process.
The payments are not like other more conventional lenders, to the extent that they are not in the business of offering multiple loans. Instead, the platform offers a single loan that has the sole purpose of paying outstanding credit cards.
Now that you know who Payoff is and what they do, in the next section of our review we will explore who is eligible to receive a loan.
Am I eligible for a payment loan?
Before delving into the fundamentals, it is crucial to explore whether or not you will qualify for a repayment loan. The threshold requirements are slightly lower compared to traditional lenders, although this is to be expected when considering the target market of the company.
- Credit Score: The absolute minimum FICO credit score Payoff will consider is 640. Although your FICO score may vary by specific office, the financial services company uses TransUnion. As such, it is worth determining what your TransUnion credit score is before starting your application.
- Credit History: You must also have a credit history of at least three years. As such, if you only took out your first credit product recently, you may not have enough credit history to be eligible for a Payment loan.
- Income: To qualify for a repayment loan, you must have a minimum income of at least $ 25,000 per year.
- Debt to income: Your debt-to-income ratio is used to assess the amount of outstanding debt you have in relation to your annual income. For example, if you earn $ 30,000 and currently have an outstanding debt of $ 15,000, then your debt-to-income ratio is 50%. To be eligible for a Payment loan, you must have a debt-to-income ratio of no more than 50%.
- Credit card debt only: Although this point may seem obvious, you can only request a repayment loan if your debt is related to the credit card debt. Anything else, and your request will be rejected.
If you meet the minimum requirements above, your Payoff loan application is likely to be accepted.
In the next section of our guide, we will evaluate the costs of applying for a loan.
Payment rates: How much does a loan pay?
When it comes to the costs of obtaining a repayment loan, this can vary considerably depending on your current solvency.
In terms of APR, this starts from as little as 5.65% (5.99% APR), to 22.59% (24.99% APR). The rate offered will depend on a number of factors, such as your current FICO score, your debt-to-income ratio, the size of your outstanding debts with your credit card and your annual income.
According to recent figures issued by Creditcards.com, the average APR rate for credit cards in the US. UU. now exceeds 17.73%. These rates are even higher if you have a credit card adapted to low to medium credit scores.
In addition to the APR, you must also make some considerations regarding the origin fee. This is the fee that lenders charge for organizing and preparing a loan contract. Payment indicates that the origin rate may vary from 0% to 5%. Once again, you will not determine the amount of the source fee until you complete the prior application process.
It is important to remember that the origin fee will be deducted from the total loan amount for which it was approved. For example, if you apply for a loan of $ 10,000 and your starting rate is 5%, you will only receive $ 9,500 for your credit card debt.
Do the fees charged for payment make it worth it?
Ultimately, if the rates offered by Payoff work in your favor it will depend on (A) what rates you are currently paying on your outstanding credit cards and (B) the rate that Payoff offers you.
In simple terms, if the rate offered by Payoff (including the origin rate) is lower than the rates you are currently paying, then it is worth taking out a Payoff loan.
Late payments and other common charges
It is also important to keep in mind that Payoff does not charge any late fees, nor is it charged if your check is returned due to insufficient funds. In addition, Payoff does not penalize you if you decide to pay your loan early.
The elimination of these common fees is excellent, among other things because they are avenues that traditional lenders often use to hit borrowers with additional charges.
Size and duration of payment loans
Payment loans are available from a minimum of $ 5,000, up to $ 35,000. The amount offered will depend on your credit profile. As such, you may be offered a smaller amount than originally requested.
In terms of the duration of the loan contract, this will vary between two and five years. Keep in mind that you have the option of choosing the duration of the loan term, provided it is within the parameters of two to five years.
How does the payment loan application work?
Step 1: verify your rates
Before continuing with your Payoff loan application, you must determine what kind of rates are likely to be offered. Fortunately for you, the platform allows you to verify your rates in the form of a flexible credit check. In other words, assessing how much you are likely to be offered, if it does, will not appear on your credit report.
Step 2: Enter your personal and financial information
If you are eligible for a Payment loan and are satisfied with the pre-verification rates offered in the previous step, you can continue with the actual application process.
Initially, you must enter certain personal information, such as your full legal name, address, date of birth and your primary telephone number.
After that, you must provide Payoff with certain information about your financial circumstances. This will include if you own your home or rent, how much you currently earn and a brief breakdown of your monthly expenses.
Step 3: Credit Card Debt Levels
Once you have completed the above, Payoff will seek to evaluate the amount of credit card debt you currently have. The company can do so using third-party sources, such as credit card companies themselves, as well as credit rating offices. This part of the application usually takes a couple of minutes.
Don't forget that if the automatic control of Payoff's debt level determines that you currently have less than $ 5,000 in credit card debts, your application is likely to be rejected.
Step 4: choose how much you want to borrow
In the next stage of the application, you will see all outstanding debts of your credit card on the screen. The payment will ask you to specify the amount of debt you want to pay. This must be a minimum of $ 5,000, up to $ 35,000.
Payoff will also estimate how much the platform will have to pay with respect to origination fees. To ensure that you can pay your credit card debt in full, Payoff will suggest that you borrow the full amount of the debt, plus the origination fee.
Step 4: Configure the login details of your payment account
Before continuing to the next step, Payoff will ask you to enter your email address and choose a secure password. These credentials will act as your Payoff login details.
It is also mandatory to select how you heard about Payoff from the drop-down list of options.
Step 5: Choose the duration of the loan agreement
On the next screen, you can choose for how long you want to borrow the money. Each time the length of the loan contract changes, the loan metrics will be updated. For example, you can see how much your monthly payments will be, the platform fee and what the total value of the loan will be once it has been fully paid.
Step 6: Employment details and social security number
Now you must enter details about your workplace. This will include your employment status, the company you work for, your phone number and your email address. You must also enter your social security number, so be sure to have it handy.
Step 7: Review and sign the loan agreement
In the final stage of the loan application, you should review the pre-generated loan agreement. Once you are satisfied with it, you must sign it digitally before completing the application.
Should I provide a payment with any supporting document?
When Payoff attempts to verify your identity, as well as your financial circumstances (such as your income), the lender will attempt to do so automatically using third-party sources. However, if they cannot do this, then you may need to provide supporting documents.
This could be a bank statement to prove that you are the true owner of your specified bank account, a passport or driver's license to verify your identity, or a recent salary or tax return to prove your income.
How long do payments take to deposit funds?
Once you have completed the loan application and received approval, Payoff declares that it generally takes two to five days to process the transfer. The funds are deposited in your US checking account. UU.
As such, it is your responsibility to pay directly to credit card companies.
Payment customer service
If you have any questions regarding your loan application, or if you currently have a pending loan with the lender, there are several ways to contact the Payoff team. The easiest way to do this is through the live chat installation of the platform.
Otherwise, you also have the option to call the team at 1-800-878-0901.
Both live chat and telephone support are only available during business hours. Unfortunately, Payoff does not really specify what they are, however, it is likely to be between 9 a.m. and 5 p.m. Pacific time.
If you have any questions or concerns outside of Payoff's business hours, you can send them a message through the online support center.
Does Payoff offer a mobile application?
Payoff does not offer a mobile application, so you must use the main desktop website. However, the platform has been fully optimized for mobile browsers, which means that you can still request and verify your account on the move.
As a lender who claims to "reduce stress, understand habits, improve financial well-being and eliminate credit card balances with a personal loan," it should not surprise us to see that Payoff offers a range of benefits for members to those who obtain One loans.
First, Payoff offers all its customers a free monthly update of their FICO score. This is useful to see if your credit card payments have resulted in an improvement in your score. Payoff actually states that its members increase their FICO credit score by 40 points. While there is no way to verify this claim, if true, 40 points is a considerable boost.
The Payoff team also offers assistance if you applied for a loan, but since then you lost your job. Presumably, this will focus on a tight payment plan. As part of the Member Experience Team role, Payoff also offers an individual welcome call, as well as an additional call every three months.
Payment review: the verdict?
In short, Payoff is very clear about what they seek to achieve. Its goal is to help people settle their credit card debts in the shortest possible time. In return, you, as a debtor, will obtain a single loan directly with Payoff.
Ultimately, whether it is worth using Payoff or not will depend on one thing: the fees.
If the APR rate that Payoff offers you during the pre-approval stage is lower that the rates that you are currently Pay your credit card provider, then it is worth using Payoff.
If this is the case, not only will it save you money, but you will also have the opportunity to consolidate multiple credit card debts into a single loan. In addition, by liquidating all credit card debts at once, Payoff states that the majority of its members increase their FICO score by an average of 40 points.
The best thing about Payoff is that you can verify your rates before continuing with your request. As this is classified as a soft credit check, there is no harm in seeing what rates are likely to be offered.
- Fast loans
- Reasonable interest rates
- Simple application process
- Lower interest rates
- You can improve the credit score
- Not available in Massachusetts, Mississippi, Nebraska, Nevada and West Virginia
- You need a credit score of 640+
Disclaimer: The opinions expressed herein are only those of the author, not those of any bank or credit card issuer and have not been reviewed, approved or endorsed by any of these entities.
Disclaimer: The answers below are not provided or commissioned by the bank advertiser. The responses have not been reviewed, approved or supported by the bank advertiser. It is not the responsibility of the bank advertiser to ensure that all publications and / or questions are answered.[ad_2]