JPMorgan Chase to offer online loans to credit card customers
JPMorgan Chase is the latest bank to see opportunity in offering new loan products to existing credit card customers.
Starting later this year, eligible cardholders will have for 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, to be called My Chase Loan, allows a cardholder to convert a portion of the unused balance on a credit card into a loan.
Company officials announced the new products during JPMorgan Chase’s annual investor day in New York on Tuesday.
Customers can request the loans online or through JPMorgan Chase's mobile app. Cardholders can also apply for My Chase loans over the phone.
The foray into digital consumer lending follows a similar effort by Citigroup, which earlier this month unveiled a new consumer loan product that lets certain existing card customers convert a portion of their credit lines to a fixed-rate loan.
The move is aimed at boosting consumer lending at a time when overall loan growth is expected to slow.
Chief Financial Officer Marianne Lake said during her presentation Tuesday morning that with business confidence weakening somewhat and "driving recessionary indicators higher," the bank would focus on making "high-quality" loans with strong yields and few risk factors.
The bank estimates that its existing card customers hold about $250 billion of loans and credit lines at other banks. That’s a big opportunity for JPMorgan Chase to win new consumer business, Jennifer Piepszak, CEO of Chase Card Services, said during an investor day presentation.
My Chase Plan lets select existing card customers take out a loan and pay it off in equal monthly payments “with a reasonable fixed, monthly fee, instead of an APR,” said MaryJane Rogers, a JPMorgan spokeswoman.
My Chase Plan loans are designed for purchases of at least $500 and will be available to existing customers of the bank’s Sapphire, Freedom and Slate cards.
My Chase Loan will let existing customers convert some or all of their card credit lines to a loan. It’s also designed for large purchases and customers can choose terms of between six and 24 months.
Customers can only submit applications at a retail branch if the branch is equipped with digital kiosks or tablets.