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|Rates (APR)||6.98% – 19.97%|
|Loan Terms||1 – 3 years|
|Loan Amounts||$3,500 – $40,000|
|Fees||Origination fee: None|
Prepayment penalty: None
Late fee: $39
American Express, or Amex, was founded in 1850 and is a financial powerhouse. Amex offers a wide array of financial services, including credit cards, gift cards, business services, and insurance. It also offers personal loans to well-qualified borrowers at affordable interest rates.
American Express personal loans are just one of the many options you have when you’re looking to borrow money. As with most personal loans, you have the flexibility to use the proceeds from an Amex loan for almost anything you’d like, including debt consolidation, home improvement, or paying for special events, such as a vacation or your wedding. However, you can’t use the funds for certain purposes, such as buying real estate, purchasing a vehicle, or paying for school.
As with most loan providers, you have a choice of repayment terms and loan rates vary depending upon your credit score, financial situation, the amount borrowed, and the length of the loan. This American Express personal loan review will help determine what you may pay for borrowing with American Express and whether the loan option is a good one for you.
In this review:
- Applying for an American Express Personal Loan
- American Express Personal Loan Rates, Terms, Fees, and Limits
- Benefits of Amex Personal Loans
- Downsides of Amex Personal Loans
Applying for an American Express Personal Loan
If you’re interested in applying for a personal loan with American Express, you can complete the process with a quick online application. However, only pre-approved American Express card members are eligible for loans, so unless you’re already an Amex customer, you won’t be able to successfully apply.
The pre-approval you received from American Express will specify the maximum loan amount you’ve been pre-approved for, but Amex stresses that you aren’t guaranteed a loan just because you’re pre-approved. American Express will need information from you during the application process and may require verification of certain financial information. Based on eligibility requirements, you may be approved to borrow less than you originally were pre-approved for or may be denied a loan.
The online application is quick and simply requests some basic details, including your Social Security number, the amount you wish to borrow, the reason you’re requesting the loan, and your desired repayment period. You may also need to provide other financial details, including your income.
When you apply, there’s no impact on your credit score because Amex will not do a hard credit check that gets recorded on your credit report, which is good since too many hard inquiries can cause your FICO score to fall.
>> Read More: What credit score is needed for a personal loan?
After you submit your application, you’ll receive a decision within seconds. Once you’ve been approved and told the loan terms, you’ll be given the chance to review and accept or reject the loan offer.
After approval, your loan funds could either be paid directly to credit card accounts if you’re taking out a loan to consolidate or refinance debt. You’ll just need to designate in your application which creditors should receive the money and the requested amount you want each creditor to receive. You could also opt to have the loaned proceeds deposited directly into an eligible bank account that American Express has on file for you or that you designate as your chosen account.
After the funds are disbursed, you’ll pay back Amex according to a fixed payment schedule, with monthly payments based on the amount borrowed, your repayment timeline, and your interest rate.
American Express Personal Loan Rates, Terms, Fees, and Limits
It’s important to understand the interest rate and terms Amex offers you before taking out an American Express personal loan. Some of the key features of American Express personal loans include the following:
- You can borrow between $3,500 and $40,000.
- There is no origination fee or prepayment penalty associated with American Express personal loans.
- Applying for a personal loan from Amex won’t affect your credit and you’ll receive an instant decision.
- The annual APR for Amex personal loans currently ranges between 6.98% and 19.97%.
- There’s a $39 late fee.
- You have a choice of loan terms. Options include one-year, two-year, or three-year repayment.
- You will typically receive funds within three to five business days after your loan is approved.
- American Express does not allow cosigners or co-borrowers. Only pre-approved card members are eligible for personal loans from American Express.
It’s important to get quotes from several lenders when you’re looking for a personal loan. You should compare what Amex is offering with competitors to find the best personal loan rates.
Benefits of Amex Personal Loans
- Your credit won’t be impacted by applying: Some lenders do hard inquiries, which stay on your report for two years. Too many inquiries can lower your credit score.
- Interest rates are competitive: Amex’s current starting APR of 6.98% is comparable to the starting APR offered by competitors, including peer-to-peer lenders such as LendingClub and Prosper. However, its high-end rate of 19.97% is well below the current maximum APR set by LendingClub and Prosper. Amex’s rates are also well below other competitors such as Upstart, which has rates currently ranging from 7.75% to 35.99%. Although Amex doesn’t offer loans with high APRs, this is largely because Amex limits pre-approval offers only to highly qualified borrowers.
- You’ll receive funds quickly: A decision on your application is instant and it could take as little as three business days to receive the funds. Competitors such as Prosper take an average of five days to provide funds after you accept the terms of your loan.
- There are no fees: You don’t pay an origination fee, unlike you do with many competitors. LendingClub, for example, charges as much as six percent of the borrowed amount as an origination fee, while Prosper’s origination fees go as high as five percent. Upfront fees reduce the amount of money you end up with after borrowing.
- Amex will pay off credit card debt for you: You can provide info on your card issuers and Amex will send the money directly to them. With other personal loans, you generally receive the disbursed funds and must repay your debt on your own if you’re consolidating debt.
There are some definite benefits associated with opting for an American Express personal loan, including the following:
Downsides of Amex Personal Loans
There are also some downsides you need to consider before taking out a personal loan with Amex, including the following:
- The maximum you can borrow is $40,000: While this is the same loan maximum as Prosper and LendingClub, other competitors allow you to borrow much more. With LightStream, for example, you could borrow as much as $100,000.
- You won’t qualify unless you’re a pre-approved Amex cardholder: This requirement disqualifies many would-be borrowers from receiving American Express personal loans.
- Repayment terms are short: The longest repayment period on American Express personal loans is three years. Competitors such as Upstart and Prosper allow you to take as long as five years to repay your loans. While longer repayment periods mean higher interest costs because you pay interest for longer, a loan with a longer repayment period also has a lower monthly payment. The short repayment timeline may make Amex’s loans unaffordable for some borrowers.
Bottom Line: American Express Personal Loans Can Be a Viable Option for Some Borrowers
American Express personal loans are an option only for certain borrowers who are pre-approved credit card members. They’re an especially great option if you’re looking to consolidate credit card debt because Amex is one of few lenders who will pay off your other creditors directly when you get a loan.
Unfortunately, if you don’t already have an American Express card, you’ll need to look elsewhere for your personal loan. But, if you can qualify, interest rates are competitive, you have a choice of loan amounts and repayment terms, and you won’t pay fees to borrow so your upfront costs are lower than with some competitors. That makes American Express personal loans a worthy choice for those who are eligible.3.74 American Express Personal Loan
Author: Christy Rakoczy
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