Best Egg vs. American Express: Which Personal Loan Is Right for You?
Updated: October 23, 2023
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The best personal loan depends on your needs and situation, but options like Best Egg and American Express are ideal if you need immediate funds. American Express features a lower maximum APR, which can be fantastic for customers who want to pay less in interest. Still, you may find Best Egg as the best option if you have good credit and a respectable salary.
You can compare lenders and find the most suitable choice for your needs with the help of MoneyGeek's comprehensive and up-to-date information on well-known personal loan lenders in the U.S.
Best Egg or American Express: Overview
Although Best Egg offers a higher maximum loan amount, American Express has a lower minimum credit score requirement. However, your financial needs and situation will determine which lender is ideal for you.
It's important to thoroughly review Best Egg and American Express, their APRs, credit score requirements, loan amount and payback terms before applying for a loan.
Best Egg
American Express
APR Range
The amount of interest a borrower will repay on their loan each year, plus any extra fees or charges imposed by the lender, is defined as an annual percentage rate (APR). Because the APR you receive is dependent on several factors, including your credit score, loan type, loan size and the underwriting model used by the lender, you aren’t guaranteed to receive the lowest APR. Keep in mind that APRs constantly change.
A borrower must have a credit score of at least 700 to be eligible for a Best Egg personal loan because the lender runs a soft inquiry to determine your rates. American Express requires that you provide your details during the prequalification procedure, but it will only provide your APR after your creditworthiness and other factors have been assessed.
Compared to Best Egg, American Express has a lower APR range – 4.93% to 19.97%. This means that more borrowers are likely to pay less in interest and other fees throughout the course of the loan.
Still, you should not limit your search for a lender to those with a low APR. Other considerations include the lender's repayment schedule, loan amounts and credit standards.
Minimum Credit Score
In most cases, your credit score will impact your eligibility for a loan and what loan terms you will receive. In general, a higher score can help you obtain better loan conditions, such as a more reasonable APR. Long-term responsible financial habits, such as paying off your credit card balances in full each month, will help you establish credit.
A borrower's credit score must be at least 700 in order to qualify for a Best Egg personal loan, while American Express requires a credit score of 660 or higher. Each lender performs a soft credit check that has no impact on your credit score. However, once you accept the Best Egg offer, a hard inquiry will be made that could have a minor impact on your credit score.
Your chances of being approved for a personal loan from American Express are higher than Best Egg, as applicants are only required to have fair-to-outstanding credit scores. However, it’s important to note that American Express only offers personal loans to preapproved cardholders.
It also shouldn’t be overlooked that those with poor credit will likely receive higher interest rates and less-than-ideal loan terms. Therefore, borrowers should ensure the terms of their loan are reasonable and appropriate for their needs.
Loan Amount Range
The lowest and highest amount that a lender will loan to a borrower is defined as the loan amount range. Best Egg allows borrowers to receive up to $50,000, which is the higher maximum loan amount of the two lenders. For major purchases like house renovations, a Best Egg personal loan would be ideal.
However, the maximum loan amounts of both Best Egg and American Express are lower in comparison to other lenders, which may offer at least $100,000. Instead of taking out several small loans from various lenders, it’s advisable to find a lender whose product line covers all of your lending needs to simplify your finances.
Best Egg's personal loan amounts vary more than those offered by American Express; the lender offers loans ranging from $2,000 to $50,000. Still, your needs will determine whether this will be useful to you. If you need an immediate but small amount of funds, American Express may be a better option because it offers same-day funding.
One of the many variables to consider is the loan amount, so it is advised to research possible lenders thoroughly before choosing one.
Repayment Terms
The length of time you have to repay a loan is determined by the repayment term, also referred to as the payback period. Usually, lower interest rates are associated with shorter repayment terms, but other variables, such as your credit score, may still play a role.
American Express provides a broader range of payback terms of two to seven years as opposed to Best Egg’s three to five years. But keep in mind that a longer payback period has some disadvantages. In other words, even if your APR is low, you will pay more interest if your payback time is lengthy — make sure to consider this when assessing a lender's repayment period.
The more flexible repayment terms offered by American Express provide borrowers more freedom to choose how long to take to pay back their loans. Your credit score will also have an impact on whether you can take advantage of this freedom; if your score is on the bottom end of the scale, you might have to abide by the rules that your provider sets.
Moreover, keep in mind that you’ll also pay more in interest for loans with longer repayment periods. If you can afford the higher monthly payment, a shorter payback period is advised.
Time to Receive Funds
The normal turnaround time for conventional lenders ranges from a few days to several weeks. Unlike traditional lenders, both Best Egg and American Express offer quick funding.
American Express is a better choice if you need a loan urgently and have fair-to-excellent credit. The lender that is best for you will depend on a number of other aspects, including the repayment terms, APR and the amount of your authorized loan, since there isn't much of a difference between the two lenders when it comes to the time it takes to receive funds.
In the case of a financial emergency, it’s best to choose a lender that can quickly disburse your funds. American Express wins slightly over Best Egg in this respect, with funds disbursed the same day that you sign your agreement. Meanwhile, your cash will be sent by Best Egg the following business day.
However, while loan disbursement time is an important factor, it shouldn’t be the main driver behind your lender choice.
Final Thoughts
Even though Best Egg and American Express provide personal loans with quick financing times, the latter emerges as the superior personal loan provider because of its lower APR range, longer repayment term and faster fund disbursement. The best lender for you, however, will ultimately depend on your financial situation and needs.
MoneyGeek outlines different borrower profiles who may find American Express personal loan as their most ideal choice:
- For those who want to consolidate debts. If borrowers desire to consolidate their existing debts, an American Express personal loan is the ideal option.
- For credit builders. Since American Express sends payment data to the major credit bureaus, customers can also raise their credit scores by paying their bills promptly.
- For consumers who want to save on origination or prepayment fees. American Express personal loans might be the best option for borrowers who want to avoid origination or prepayment fees.
In the end, an American Express personal loan is better suited to people with fair-to-excellent credit because of its loan agreement details.
Frequently Asked Questions About Personal Loan Lenders
You should weigh your options carefully before taking out a personal loan. MoneyGeek answered some frequently asked questions about personal loan lenders to assist you with the process.
Lenders can differ in what they require for a personal loan application. However, the majority of lenders require a completed application form, proof of identity, income verification and proof of address.
TransUnion, Equifax or Experian can provide you with a detailed analysis of your credit score. You can use this to better understand your score and the factors that led to it.
Yes, the majority of lenders will do a hard credit pull once you complete your application. This entails thoroughly reviewing your credit history from one of the major credit agencies, which may temporarily lower your score.
No, different factors are being considered to calculate your APR or interest rate, which varies from lender to lender. Because of this, it is essential to compare lenders before submitting a loan application.
Yes, although the costs may differ from one lender to another. Most lenders typically charge a late payment fee or a penalty for early repayment. You should check with your lender whether they charge additional costs like origination fees, application fees, returned check fees and payment protection insurance.
Convenience and speed. You can apply for a personal loan virtually anywhere and most lenders offer a simple online application process.
You are allowed to repay your debt early, but some lenders may charge a prepayment penalty fee.
sources
- American Express. "American Express® Personal Loans." Accessed September 19, 2022.
- American Express. "Frequently Asked Questions." Accessed October 23, 2023.
- Marlette Funding, LLC. "Personal Loans." Accessed September 19, 2022.
- Best Egg. "Personal Loans." Accessed October 28, 2022.
The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.
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