The 19-year-old has been on the fringes of Arsene Wenger's side so far this season, having made three appearances in all competitions - including a brief cameo in the 5-1 defeat to Bayern Munich in the Champions League - and the Mirror suggest that his manager is keen for the Nigeria international to go out and get some experience elsewhere.
The Championship duo have both made promising starts to the campaign - with Gary Rowett's men sitting just inside the play-off places, while the Royals are just one place below - and thus, a loan spell to either club will provide the youngster with the opportunity to consistently feature in games that provide plenty of pressure.
While Wenger is keen for Iwobi to get some first-team experience, the Mirror suggest that he may be forced to put any plans for a temporary departure on hold, given the injury problems that are currently plaguing the Arsenal squad.
Aaron Ramsey, Theo Walcott, Jack Wilshere and Alex Oxlade-Chamberlain are just some of the members of the first-team currently on the sidelines (as reported by the Daily Mail) meaning that with the busy Christmas period on the horizon, it would not be a surprise - should he stay - to see Iwobi feature more prominently for the Gunners before potentially completing a loan move in January.
Despite the injury problems, Iwobi is still likely to be at the lower end of the pecking order, and thus, he may be eager to leave the club for the time-being and establish himself much in the same way that Liverpool winger Jordon Ibe did so well at Derby County last season.