Is it right for you?
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Personal loans have become a popular option to cover a variety of large expenses such as: B. a home renovation, a wedding, a surprise edition, a funeral and more. In some cases, it can actually be cheaper to use a personal loan than to use a credit card since personal loans tend to have lower interest rates.
It is even better if a personal loan, such as American Express® personal loans, do not charge application fees or creation fees. American Express is also one of the few big known names in the big banking industry to offer personal loan products to retail customers.
Of course, however, you should always do your research before applying for any financial product and make sure you are familiar with the terms of that product before signing on the dotted line.
To help you, Select looked at Amex’s APR, perks, fees, loan amounts, and term. (Learn more about our methodology below.) Read on to find out if American Express is the right lender for you.
Annual Percentage Rate (APR)
Debt consolidation, home improvement, moving expenses, wedding or vacation
Penalty for Early Payout
The APR ranges from 6.91% to 19.97% for American Express personal loans. Unlike most other personal lenders, American Express does not offer an interest rate rebate on payments made with Autopay (a 0.25% rebate is normally applied when you sign up so your payments are automatically credited to your balance).
The APR range for these personal loans is slightly higher compared to some other lenders, but Amex personal loans have fixed interest rates that don’t fluctuate over the life of your loan term. Also, keep in mind that, in general, the better your credit score, the lower your interest rate will be. American Express does not disclose the exact minimum credit score required to qualify for its personal loan products.
While you must be an existing one American Express Card Members applying for a personal loan are not eligible for Membership Rewards® points or insurance benefits (or other perks normally available with Amex cards).
However, there is some flexibility when it comes to payment methods for your monthly payments. You can make payments online, via Autopay, or by check to the appropriate address. Again, though, remember that while Autopay is an option to pay off your loan, there is no discount for using the service.
American Express doesn’t charge an application fee or an origin fee, and they exist no prepayment penalty for special payments to repay your loan early.
However, there is a $39 late fee that will be charged to your account if a payment is made after the due date shown on your account or bill, or if you do not have enough funds in your bank account to make the payment for the month in full .
Similar to any other loan or credit product, failure to pay on time can result in the lender reporting to a credit bureau, which can affect your credit score.
Loan amounts vary from $3,500 to $40,000, making this lender an attractive option for those who need medium-sized loans (personal lenders can do this). Offer up to $100,000). However, keep in mind that not every applicant is eligible for the maximum loan amount. Eligibility can usually depend on factors such as your credit rating.
Most application decisions can be made in a matter of seconds, which can be beneficial if you’re hoping for faster processing. However, if additional information is required or incomplete information and documentation has been submitted, this may delay your decision.
Once approved, you can expect the funds to be deposited into your bank account within 3-5 business days. You also have the option to have the money sent directly to up to four creditors (you only need to provide American Express with the credit card numbers and the amount to be paid to each).
And while American Express personal loans can be used for everything from debt consolidation to financing a home repair. There are a few things you can’t use an American Express personal loan for, including post-secondary education expenses, real estate, business expenses, vehicle purchases other than a down payment, to pay off American Express credit card balances, or for any illegal purpose.
Applicants can choose between terms of 12 to 36 months.
American Express® personal loans are a great bare-bones option for those who are already American Express card members and are already familiar with the company’s products.
Some lenders charge a penalty for prepaying your personal loan because they would avoid that interest cost, but with American Express, you can avoid that fee.
If you’re looking for slightly lower interest rates and the opportunity to get an autopay rebate, take a look around LightStream Personal Loanthat offers that 0.25% APR discount for automatically paying your bill every month.
And if you need a smaller personal loan amount that is under $3,500, there are other options such as PenFed Personal Loansthat start at just $600.
To determine which personal loans are the best, Select analyzed dozens of US personal loans offered by both online and brick-and-mortar banks, including major credit unions, that offer no origination or application fees, fixed interest rates, and flexible loan amounts and terms for a range of funding needs.
In narrowing down and ranking the best personal loans, we focused on the following characteristics:
- No setup or registration fee: None of the lenders on our best-of list charge borrowers an upfront fee to process your loan.
- Fixed rate annual percentage rate: Variable interest rates can rise and fall over the life of your loan. With a fixed APR, you lock in an interest rate for the life of the loan, which means your monthly payment will not vary, giving you more budgetary predictability.
- Flexible minimum and maximum loan amounts/terms: Each lender offers a variety of financing options that you can customize based on your monthly budget and how long it will take you to repay your loan.
- No prepayment penalties: The lenders on our list do not charge borrowers for prepaying loans.
- Optimized application process: We checked that lenders offer same-day approval decisions and a fast online application process.
- Customer service: Every loan on our list offers customer service via phone, email or secure online messaging. We also chose lenders with an online resource hub or advice center to help you learn about the personal loan process and your finances.
- Fund payout: The loans on our list deliver the money instantly either via electronic transfer to your checking account or in the form of a paper check. Some lenders (which we mentioned earlier) offer the option to pay your creditors directly.
- Autopay discounts: We’ve listed the lenders that reward you for signing up for Autopay by reducing your APR by 0.25% to 0.5%.
- Creditor Payment Limits and Loan Sizes: The above lenders offer loans in a range of sizes, from $500 to $100,000. Each lender posts their respective payment limits and loan sizes, and completing a pre-approval process can give you an idea of what your interest rate and monthly payment would be for such an amount.
After reviewing the above characteristics, we’ve sorted our recommendations by best for overall financing needs, debt consolidation and refinancing, small loans, and next-day financing.
Note that the interest rates and fee structures advertised for personal loans may vary depending on the Fed interest rate. However, once you accept your loan agreement, a fixed effective interest rate guarantees your interest rate and monthly payment will remain constant throughout the life of the loan. Your APR, monthly payment, and loan amount depend on your credit history and creditworthiness. To obtain a loan, lenders complete a hard loan request and request a complete application, which may require proof of income, identity verification, proof of address, and more.
Editorial note: Any opinion, analysis, review, or recommendation expressed in this article is solely that of Select’s editorial team and has not been reviewed, approved, or otherwise endorsed by any third party.