American Express Personal Loan Review
What is American Express?
Founded in 1850, American Express® is a U.S.-based company best known for its credit cards and charge cards — but it also offers other financial products and travel-related services to businesses and people all over the world. The company has 55,000 employees and is helmed by CEO Stephen J. Squeri.
In the U.S., current consumer cardholders might be eligible for an unsecured personal loan of up to $40,000. Is it a good offer? We’ll take a look, and offer some alternative options, in this review.
American Express personal loan highlights
- Only available to preapproved American Express cardholders. You must be the primary cardholder on a consumer American Express card, be in good standing and receive a preapproval from American Express to qualify for a personal loan.
- The loan’s specifics depend on your offer. If you receive a preapproval offer, you may be able to choose from three repayment terms and can borrow up to the preapproval amount. Some people only get preapproved to use the loan to consolidate credit card debt.
- No origination or prepayment fees. You don’t have to pay any fees to take out the loan or if you want to pay it off early.
- Fixed interest rate. You can set your budget for the future knowing the interest rate and monthly payment won’t increase in the future.
American Express Personal Loan Details
|Terms||Fees and Penalties|
|● Term lengths: 12 to 48 months
● APR: Starts at 6.98%
● Loan amounts: $3,500 to $40,000
● Time to funding: 3 to 5 business days
● Credit check: Check your rate with a soft pull; a hard pull might be required to complete the application
|● Origination fee: No origination fee
● Prepayment fee: None
● Late payment fee: $39
● Other fees: Not specified
American Express product details
Getting a personal loan from American Express could help you pay for a large purchase or save money by consolidating other higher-rate loans or credit cards. But an American Express personal loan isn’t available to everyone.
To qualify, you’ll need to be the primary cardholder on a consumer American Express card and get preapproved. Your preapproval will have the maximum amount you can borrow, which may be lower than the $40,000 max others receive — and you might only get preapproved for a credit card debt consolidation loan.
Still, there are other personal loan options that you can apply for without a preapproval; you may also be able to check your rates from other lenders with a soft credit pull, which won’t hurt your credit scores.
If you do get preapproved for an American Express personal loan, you can get any loan amount from $3,500 to your maximum preapproved amount. You’ll also get to choose between three loan terms: 12 to 48 months on the personal loan website.
- Minimum credit score: Not specified
- Minimum credit history: Not specified
- Maximum debt-to-income ratio: Not specified
Besides meeting American Express’ financial and credit requirements, there are a few other requirements you’ll need to meet to qualify for a personal loan. You must:
- Either be a U.S. citizen or resident
- Be at least 18 years old
- Be in good standing and the primary cardholder (not an authorized user) on an eligible consumer American Express card
- Have a preapproval offer from American Express
- Have an American Express online account (although you can create this during the application process)
Applying for a personal loan from American Express
Once you receive a preapproval offer from American Express, you can complete an online application to get your official loan offer, which may vary from the initial offer based on changes in your credit or finances. Some borrowers are approved for a personal loan that they can use for almost anything, while others are approved for a personal loan to pay off existing credit card debt.
The total amount you can borrow will be listed on your preapproval offer, but you can choose to borrow less if you want. You’ll also be able to choose from one of three loan terms.
Once you submit an application and are approved (which may only take seconds), you’ll have three days to review your loan documents and sign the loan agreement. If you don’t complete the loan agreement within those three days, the offer will be rescinded, and you’ll need to wait at least 60 days before applying for another American Express personal loan.
If you’re using the personal loan to consolidate credit cards, American Express can send the loan amounts to up to four eligible credit card issuers (you can’t use the loan to pay off American Express accounts). You must borrow at least $1,000 toward each credit card account and still meet the $3,500 minimum total loan amount.
If you’re taking out a personal loan for something else, you’ll need to have a checking account linked to your American Express account. If you already have a checking account linked to your credit card, American Express can use that account. Otherwise, you’ll have three days (from when you sign your loan agreement) to submit your checking account info.
Once you sign your loan agreement, it generally takes American Express three to five business days to send your loan to your credit card issuer or verified checking account.
Pros and Cons of an American Express Personal Loan
|● Soft Pull preapproval. While getting preapproved doesn’t guarantee you’ll qualify for a loan, it’s a positive sign, and the soft credit pull won’t hurt your credit scores.
● Direct credit card payments. If you’re taking out the loan to consolidate credit card debt, American Express will send your payments directly to up to four eligible credit card issuers.
● Online application and funding. Some lenders require you to send in a paper application, visit a branch or send your loan as a check. With American Express, the entire process is done online.
|● Only available to cardholders. You won’t be eligible for a personal loan from American Express if you’re not already a cardholder. Other lenders offer personal loans to any eligible applicant.
● Limited loan terms. You have to choose from three loan term options. Other lenders might give you more choices, which could make your monthly payments more manageable.
● No direct American Express credit card consolidation. You need to have an American Express card to qualify for the loan. But if you’re approved for a credit card consolidation loan, you can’t use the money to pay off an American Express card.
Who’s the best fit for an American Express personal loan?
An American Express personal loan simply isn’t an option if you haven’t received a preapproval offer. But if you do, should you accept the loan offer? It depends.
If the preapproval offer meets your needs when it comes to the loan amount and use, then it could certainly be a decent choice. The lack of an origination fee and prepayment penalty could save you money, and the ability to have American Express directly pay your credit card issuers can streamline the credit card consolidation process.
But you may still want to see if you can get preapproved for a lower-rate personal loan from a different lender. Others lenders also offer unsecured personal loans without origination or prepayment fees, and you might find you get a lower rate, longer loan terms or larger loan amount (if that’s what you need) elsewhere.
If you find you don’t qualify for an American Express personal loan due to your credit score, you may want to consider other lenders. You could also look into credit repair.
Alternative personal loan options
Discover Personal Loans
Discover Personal Loans is another company that may be better known for its credit cards than personal loans, but it does offer personal loans. You don’t need to be a cardholder to qualify, and you could get approved for up to $35,000. There are no origination or prepayment fees, and it can also send your loan amounts directly to creditors if you want to consolidate higher-rate debts.
If you want to take out a personal loan to consolidate credit card debt, a Payoff loan could be a good option. You can get preapproved with a soft pull and borrow $5,000 to $35,000. It’s an online process, but you’ll get the loan in your bank account and will then need to pay off your credit cards. Payoff charges some borrowers an origination fee, which you should take into consideration as you compare loan offers.
SoFi also has a completely online personal loan application and funding process and doesn’t charge origination or prepayment fees. You can also check to see if you’re preapproved with a soft pull. Depending on your creditworthiness, you may be able to borrow $5,000 to $100,000 and repay the loan over 24 to 84 months.