If you’re an American Express cardholder, you might have received mail or an email about being preapproved for a loan. Although you might’ve ignored the offer up until now, it could be something to consider.
With American Express personal loans, you already know the company thinks you have good enough credit to apply. The company has made the application process simple, too. In minutes, you can find out if you’re approved for an unsecured personal loan. You can then use that cash for things such as making home repairs, consolidating credit card debt, or paying for your wedding.
But should you take out a loan with American Express? Here’s what you should know first.
American Express personal loans
An American Express personal loan promises you can “turn dreaming into doing” by getting approved for up to $40,000 quickly and easily. But, you should understand the pros and cons first.
Pros of American Express personal loans
Knowing you’re preapproved and have the backing of a company you trust is just one of the positives of an American Express personal loan. Here are a few more:
Low interest rates: American Express offers fixed interest rates with APRs as low as 6.98%, as of May 2, 2018. You can check the latest rates here. Compare its personal loan rates to 2018 averages, which range from 10.30% to 32.00%, according to ValuePenguin.
Soft credit check: If you’re curious to see what rates you could get with an American Express personal loan, go for it. Simply applying won’t affect your credit score. Only when you’re approved and agree to the terms will anything be reported to a credit agency.
Debt consolidation: American Express could offer you a lower interest rate compared to your current credit card’s. You can consolidate up to four credit cards into one fixed monthly payment. All this equals significant savings in the long run.
Easy repayment: You’ll pay the same amount each month for the duration of your term. To make repayment easier, set up autopay.
No origination or prepayment fees: Many personal loans come with a 1% to 6% origination fee. But American Express doesn’t charge an origination or prepayment fee.
Cons of American Express personal loans
The pros are certainly alluring, but you should be aware of the drawbacks as well:
Loan eligibility: You can only apply for an American Express personal loan if you’re already a member and preapproved.
Loan disbursement: While some personal loan companies offer funds in one day, American Express says it takes three to five business days to disburse your money.
Interest rate cap: Although you’re likely getting preapproved because of your credit score and record of on-time payments with the company, you could face an interest rate up to 18.97%, as of May 2, 2018.
American Express personal loan products
The famous credit card company highlights several ways you can use its personal loans. Here are a few possibilities:
Home improvements: American Express says you could use a personal loan to install “the countertop of your dreams” or upgrade your appliances. Doing so could help increase the value of your home.
Wedding costs: Your dream wedding could come to life with an American Express personal loan. Pay for things such as invitations, vendors, or your venue.
Debt consolidation: With no origination fee and potentially lower interest rates, an American Express personal loan could help you get out of debt faster.
Vacations: You can borrow money to plan that bucket list getaway.
These are just the main suggestions American Express offers on how to use its personal loan. But a personal loan can really be used for any household purpose, major purchase, or life event.
Keep in mind: American Express has business loans listed as a separate option. Also, you can’t use its personal loan to cover college costs. If you need help paying for your education, research private student loan lenders.
Using the American Express online system
You likely already got a notice that you were preapproved for an American Express personal loan, which makes starting the application process easier. Here’s how to apply.
Step 1: Estimate your monthly payment
To start the formal application process for American Express personal loans, you’ll be asked to fill in the amount you’re looking to borrow in addition to your estimated credit score. You’ll then be shown initial repayment options for 12-, 24-, and 36-month terms. Click “Check your rate” to continue.
Step 2: Check your interest rate
On the next page, you’ll find your preapproved interest rate and decide how you want your funds disbursed.
Step 3: Choose a repayment plan
You’ll then have to enter the loan amount again and choose between monthly payment options.
Step 4: Declare the purpose of the loan
During this step, you’ll provide the reason why you’re taking out a personal loan. Keep your banking information handy, too. You’ll need to provide it if you’re formally approved.
Step 5: Enter your personal information
To proceed, you’ll need to provide basic information such as your email address and annual income.
Step 6: Agree to the loan terms
You’ll then be asked to check a box agreeing to the terms. Click “Submit” to find out if you’re officially approved.
American Express personal loan interest rates and fees
Ultimately, financial factors such as your credit score and income will determine your interest rate, which can range from 6.98% to a maximum 18.97%.
A $10,000 loan paid back over 36 months at a 7.98% APR would equate to a monthly payment of $313.32. Overall, you’d pay $1,279 in interest, putting the total cost of the loan at $11,279.
Luckily, there are no origination or prepayment penalties. But you’ll be charged $39 if a payment is late. Your late payment might also be reported to a credit reporting agency.
American Express personal loan eligibility requirements
American Express says you only need to meet a few criteria to be eligible for a personal loan. You must be:
A U.S. citizen
18 years or older
An American Express cardholder in good standing
The company doesn’t state a minimum credit score. However, you’ll likely have a good one if you’re preapproved. Meanwhile, providing details such as your total assets are optional during the application process.
American Express customer service
The contact information for the personal loan division of American Express is different than for its credit cards. You can reach customer service by phone from 10 a.m. to 8 p.m. ET at 844-273-1384.
Note: Student Loan Hero has independently collected the above information related to American Express personal loans. American Express has neither provided nor reviewed the information shared in this article.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|6.26% – 14.87%1||$5,000 - $100,000||Visit SoFi|
|6.99% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|