JPMorgan Chase will offer online loans to credit card customers
JPMorgan Chase is the latest bank to see the opportunity to offer new loan products to existing credit card customers.
Starting later this year, eligible cardholders will have two new types of loans available to them. One, dubbed My Chase Plan, is a loan with a fixed monthly fee instead of an annual percentage rate. The other, which will be called My Chase Loan, allows a cardholder to convert a portion of a credit card’s unused balance into a loan.
Company officials announced the new products at JPMorgan Chase’s annual Investor Day in New York on Tuesday.
Customers can apply for the loans online or through the JPMorgan Chase mobile app. Cardholders can also apply for My Chase loans over the phone.
The foray into digital consumer loans follows a similar effort by Citigroup, which earlier this month unveiled a new consumer loan product that allows select existing card customers to convert a portion of their lines of credit into a fixed rate loan.
The move aims to boost consumer lending at a time when overall loan growth is expected to slow.
Chief Financial Officer Marianne Lake said in her presentation on Tuesday morning that with some weakening in business confidence and “a rise in recessionary indicators”, the bank would focus on making “high quality” loans. ” with high returns and few risk factors.
The bank estimates that its current customers hold about $250 billion in loans and lines of credit from other banks. This is a great opportunity for JPMorgan Chase to win new business from consumers, said Jennifer Piepszak, CEO of Chase Card Services, during an Investor Day presentation.
My Chase Plan allows certain existing card customers to take out a loan and repay it in equal monthly installments “with a reasonable fixed monthly fee, in lieu of an APR,” said JPMorgan spokeswoman MaryJane Rogers.
My Chase Plan loans are designed for purchases of at least $500 and will be available to the bank’s existing Sapphire, Freedom and Slate card customers.
My Chase Loan will allow existing customers to convert all or part of their card lines of credit into a loan. It’s also designed for larger purchases, and customers can choose terms between six and 24 months.
Customers can only submit requests at a retail branch if the branch is equipped with digital kiosks or tablets.