Payoff Loan Facts
Nowadays, there are so many different kinds of loans to choose from and it can be a bit daunting. Not all loans and lenders are the same, so you have to know what you need in order to get exactly what you want and what you can afford.
One of the most popular loans available today is a payoff loan. If you want to learn more about loans and payoff loan, here are some facts that you should know.
Why Do I Need a Loan?
People need loans for various different reasons, and those reasons determine what kind of loan you need. For instance, if you had a small hospital visit that costs a few hundred dollars, you can pay for it with a small personal loan.
If you need to pay off some debt, then you would need a debt consolidation loan. If you want to make a big purchase such as a home or a vehicle, you would need a long-term auto loan or home loan.
However, you have to really think about whether or not you can actually get a loan or not. Putting requirements aside, you have to take yourself into account.
For instance, you might want to make a purchase of a gadget that you don’t really need right now and may not make enough money in the future to pay off the loan.
If you know you can’t afford something, it would be best that you don’t get one. However, if you have used a loan calculator and see that you can afford the monthly payment, then you can most certainly get a loan.
What Do I Do When I Look for Loans?
You can find loans in many places, from the banks to the internet. You should know what you should look for in the loan besides what kind of loan you need.
You should always try to find a lender who understands your needs and will be reasonable with you. You should try to find a loan with good interest rates.
However, the interest rates could depend on what your credit score is because most lenders base their decisions on your credit score.
Additionally, you should always look for a lender who makes themselves available to you. Even if you get a loan online, they should give you a reply very quickly.
The lender should also have a good reputation with their past clients and trustworthy. A lender who offers good loan terms to their clients will always be highly reviewed.
You should also try to to keep the loan term in mind when you are getting a loan. Many people prefer to pay low monthly payments, which usually means that a lender would extend the loan term to make it longer, therefore the monthly payments would be smaller.
However, that could rake up in additional cost if you add up the interest over time. We usually urge borrowers to pick the shortest loan term as possible to save more money on interest.
However, there are loans that have set repayment schedules and terms. If you get a payday loan for instance, you may be stuck with having to repay that within one to three months and it cannot be extended.
Most auto loans would range over 2-7 years, and if you were to try to pay it back sooner, it would be difficult. Additionally, some lenders will charge you if you try to pay off your loan early.
One of the most popular kinds of loans available today is a payoff loan. They offer great loans for debt consolidation that come at a fixed rate.
Mainly, it is meant to consolidate debt from credit cards. The more debt that you have in credit cards, the lower your credibility will be because of a low credit score and you will have a bad banking history.
Thankfully, a payoff loan can help you deal with that right away.
They have a simple application process that takes almost no time at all. Another good thing is that when they check your credit score or when you take out a payoff loan, it would affect your credit score.
You need to have at least a 640 credit score, which is good since it reaches some people with low credit scores, and your credit history has to be at least two years.
Another requirement is that your debt to income ratio has to be at 50% or lower than that and you have to earn at least $40,000 a year.
One of the best benefits of getting a payoff loan is that you get to choose a lot of the terms. You can see what offers are available once you have applied and you get to choose which one best suits your needs.
They also have a lot of payment flexibility, because if you pay for a repayment late you will not get a penalty fee.
They will just have a representative talk to you to be able to make a plan to catch up to any late or skipped payments, which makes them a very understanding lending company.
You should always look for lenders who are responsive. Payoff has excellent customer support for their borrowers and applicants.
You can use their online customer support chat to ask some common questions. You can even talk to one of their members to help get advice on how you can pay back the loan efficiently and even make financial goals for the future.
Good customer support shows that a company truly cares about their service and how their clients feel.
What’s more, you can get your FICO score for free. Payoff loan is partnered with several credit unions that issue loans.
They were also referred to as the Best Debt Consolidation Loan of 2019. Their current interest rates are 5.99%-24.99%, which is very low especially when you compare it to other large lending companies.
You may also get charged with an origination fee of 2-5%.
A big benefit that you can get from a payoff loan is that they don’t charge you for late fees. As mentioned earlier, they will just assist you on how to catch up on the payments and make better financial decisions.
You also don’t get any prepayment fees, so if you want to pay your loan a bit earlier than usual, you won’t get any extra charges. They also don’t charge you to process any checks.
Typically the loan can last from anywhere from 2 to 5 years and they expect monthly payments. Their monthly payments are fixed, so you won’t get any surprises so you will know exactly how much you will be paying every month.
Another bonus is that they are designed to help raise your FICO score, which is great if your credit score just reaches their minimum requirement of 640.
Remember, their main goal is to get you out of debt and keep you out of it, so combining their financial guidance and rebuilding credit factors, they are an all-around great lending company.
Why Would I Need a Payoff Loan?
Not everyone has access to credit cards which could normally help them consolidate their debt. A payoff loan can help consolidate debt from credit cards, so obviously you can’t use a credit card to fix that.
They also offer lower rates than some credit cards and the plans are customizable to suit your needs as mentioned earlier.
If you are looking for a loan to help you boost your credit score while getting the cash you need, a payoff loan would be great for you, since on average most of their clients FICO score raises about 40 points.
What Are the Disadvantages of a Payoff Loan?
The main disadvantage of a payoff loan is that it might not be available in your states. A payoff loan is currently only available in 21 states, but you can check their website to see if it is available in your state.
This may not be a direct disadvantage, but payoff loan deposits your loan money straight into a checking account instead of paying off the debt for you.
If you are not careful, you could end up spending the money elsewhere.
How Do I Sign Up?
You will need to have a 640 credit score, a 50% and lower debt to income ratio, earn at least $40,000 every year, and have a credit history of at least two years.
You should also have a currently clean life, which means that you cannot have any current felonies on you.
While these requirements actually do not guarantee your loan approval, it is good to have all of these in order to raise your chances.
These are the basic requirements that they need from applicants in order to be considered.
Keep in mind that you can only use their loan for debt consolidation purposes. If you state that you want their loan for other reasons, there is a chance that they will deny the loan.
The application process itself is very easy, as it is designed to be as quick and straightforward as possible.
When you apply, it only takes a few minutes and you can use their website too to check the rate for your loan online.
Once you have submitted all the required information in their online application, just wait a little bit.
They will then do a soft credit check (doesn’t affect your credit score) to see what your current balances are for your credit cards.
They will also suggest the term and amount for your loan, which will be based off of your credit card balances.
Keep in mind that a hard credit check is done when you apply whilst a soft credit check is done for when you check your loan rate.
A payoff loan can be a great way to deal with your credit card balances right away while helping you raise your FICO score.
It is accessible to most people as long as it’s available in your state. It is rather easy to reach their requirements, making it one of the best debt consolidation loans available in America.
To learn more about debt consolidation, read some of the helpful articles on dedebt.com