Tuesday, 16 July 2019

American Express Personal Loan Review

American Express Personal Loan Review
18 Jun
10:49
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American Express
APR

6.98%
To
18.99%

Credit Req.

Fair to excellent

Minimum Credit Score

Terms

12 to 48

months

Origination Fee

None

American Express personal loan details
 

Fees and penalties

  • Term lengths: 12 to 48 months
  • APR range: 6.98% to 18.99%
  • Loan amounts: $3,500 to $40,000
  • Time to funding: Typically 3 to 5 business days after you sign the loan agreement
  • Credit check: Soft Pull
  • Origination fee: None
  • Prepayment fee: None
  • Late payment fee: $39

American Express product details

Personal loans do not come with the perks often attached to American Express card products, like Membership Rewards, cash back or insurance benefits. However, the only fee associated with personal loans is a late fee — $39 if your payment is late or not made in full, which can result in major savings. To help you avoid late payments, the company offers an autopay feature.

If you’re using a personal loan for debt consolidation, American Express makes the process easy by sending your funds directly to the issuer. Payments can be disbursed to up to four personal credit card accounts held by most major credit card issuers. You’ll find out if your credit card account is eligible during the application process.

Eligibility requirements

  • Minimum credit score: Fair to excellent
  • Minimum credit history: Not specified
  • Maximum debt-to-income ratio: Not specified

To be preapproved for an American Express personal loan, you must meet the lender’s minimum eligibility requirements. This includes being:

  • A U.S. citizen or resident of the U.S. or its territories
  • At least 18 years old
  • A basic card member with an eligible consumer American Express card with at least nine months of account history that is in good standing at the time of application submission

Applying for a personal loan from American Express

Only preapproved American Express card members are eligible to apply for a personal loan. During the preapproval process, you’ll be asked to provide basic information, like the amount of money you’d like to borrow, desired repayment period, loan purpose, contact information and income. Keep in mind, however, that some card members may only be preapproved to use their personal loan for credit card debt consolidation.

All personal loan applications must be submitted online. You’ll need an American Express online account and valid email address, and you must agree to receive electronic communications and other online documents. Do note, however, that preapproval is not a guarantee that you’ll be granted a loan — but if your application is approved, you’ll have up to three days to review and accept the terms.

If your personal loan was approved to pay down credit card debt, the funds will be sent directly to the accounts designated on your application. Otherwise, the money will be sent to an eligible bank account on file with American Express. If you don’t have an eligible bank account on file, you have three days from the date you sign your loan agreement to add a personal checking account in your name or your loan agreement will be deemed void and unenforceable.

Pros and cons of an American Express personal loan

Pros:

Cons:

  • Minimal-to-no fees. The sole fee associated with an American Express personal loan is a $39 late fee, assessed only on late payments and those not made in full.
  • Wide range on loan amounts. American Express personal loans are available in increments from $3,500 to $40,000. The amount granted is based on creditworthiness and other factors.
  • Multiple repayment periods. Applicants will have the option to choose among several repayment periods (thereby allowing you to secure a monthly payment that doesn’t put a strain on your budget). Approved borrowers may receive offers ranging from 12 to 48 months.
  • Soft credit pulls. Applying for an American Express personal loan will not impact your credit score. But if you’re approved, loan details will be sent to credit reporting agencies, which could affect your credit score.
  • American Express credit card required. Only preapproved American Express card members are eligible to apply for a personal loan through the company, and you must have had that account for at least nine months.
  • No perks. Personal loans do not come with perks offered on American Express cards, such as Membership Rewards, cash back or insurance benefits.
  • Not for bad-credit borrowers. Only cardholders with fair to excellent credit are encouraged to apply. American Express recommends that applicants with a credit score of 659 or less improve their credit before submitting an application.

Who’s the best fit for an American Express personal loan?

An American Express personal loan can be a great choice for cardholders who don’t want to pay fees. Since the only fee associated with the loan is a $39 late fee — assessed only on late payments and those not made in full — you won’t pay any fees if you satisfy your monthly financial obligation.

Having several repayment periods available can also be a helpful option. This gives you the opportunity to choose a monthly payment that works best with your budget.

Considering the loan amount ranges from $3,500 to $40,000, this product is geared toward borrowers who need a higher loan amount. It’s also a better choice for cardholders with higher credit scores, as loan offers — including APR and maximum borrowing power — are based on creditworthiness and other factors.

Before moving forward with an application, it’s a good idea to check out reviews from other consumers and get a feel for the lender’s general reputation.

American Express consumer reviews

American Express has an A+ rating from the Better Business Bureau. The lender does not yet have reviews on LendingTree, our parent company.

To learn more about American Express, we recommend contacting the lender for a firsthand experience at its customer service and to get answers to any outstanding questions. You may also check the lender’s social media pages to see its activity and how consumers are responding. This may help you make a more informed decision before moving forward.

American Express FAQ

No. According to the site, “your credit score will not be impacted when you apply,” but the loan will be reported to the credit bureaus once you’re approved and agree to the terms.

You won’t be able to take out that loan, but your credit score won’t be impacted either. That’s especially helpful if you intend to look elsewhere for personal loans. Either way, keep in mind that not all borrowers are approved for the highest loan amount.

These loans can be used for personal, household or family purposes. For example, paying for household renovations or a life event, like the birth of a child. However, some applicants may only be approved for credit card consolidation.

If you use your loan to pay down credit card balances directly, you cannot put that money towards an American Express card. However, those who receive their funds directly may choose to use some of their funds to do so. But keep in mind that not all applicants will be approved for that disbursement option.

Most major credit card banks are eligible for direct payments via this loan. You would find out if your credit card is eligible during the application process.

Your payments are fixed for the term of your loan and will depend on how much you borrowed, your interest rate and the length of your term.

No, that’s set by the lender and cannot be changed.

You’ll have to pay a $39 late fee, and American Express may inform the credit bureaus, which would negatively impact your credit score.

You can only apply for a business loan if you have an American Express business card, and those funds can only be used for business purposes.

Alternative personal loan options

LightStream

LightStream
APR

3.99%
To
16.99%

Credit Req.

660

Minimum Credit Score

Terms

24 to 144

months

Origination Fee

No origination fee

LightStream is the online lending division of SunTrust Bank.Read More


Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.99% APR with a term of 3 years would result in 36 monthly payments of $295.20.

LightStream is an online lending division of SunTrust Bank. It offers personal loans for between $5,000 and $100,000 with rates as low as 3.99% with autopay; however, note that lender rates vary based on the loan purpose. Still, LightStream doesn’t charge origination fees, plus it offers loans with terms from 24 to 144 months, so it could be a low-cost and flexible option for borrowers.

Marcus by Goldman Sachs®

Marcus by Goldman Sachs®
APR

5.99%
To
28.99%

Credit Req.

Varies

Minimum Credit Score

Terms

36 to 72

months

Origination Fee

No origination fee

Marcus by Goldman Sachs® offers personal loans for up to $40,000 for debt consolidation and credit consolidation. Read More


Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans).Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions. For New York residents, rates range from 5.99% to 24.99% APR.

With no origination or late fees, Marcus by Goldman Sachs may be an affordable option for a personal loan. The lender offers loans for up to $40,000 with rates as low as 5.99%. Further, you can see rates with a soft pull.

LendingClub

LendingClub
APR

6.95%
To
35.89%

Credit Req.

600

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

1.00% – 6.00%

LendingClub is a great tool for borrowers that can offer competitive interest rates and approvals for people with credit scores as low as 600.Read More

LendingClub may be a great option for borrowers with less-than-stellar credit. It has a minimum credit score requirement of 600. Its personal loans come with rates as low as 6.95% and as high as 35.89%. You can expect an origination fee between 1.00% – 6.00%.

Devon Delfino contributed to the reporting for this article.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Laura Woods
Laura Woods |

Laura Woods is a writer at MagnifyMoney. You can email Laura here

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Source: https://www.magnifymoney.com/blog/personal-loans/american-express-personal-loan-review/

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