The England Under-21 international is considering his options at Stamford Bridge.
The England Under-21 international has flirted with the Chelsea first-team this season and was widely praised for some of his performances when called upon by Jose Mourinho.
However it was reported in November by The Independent that Loftus-Cheek was tired of waiting for first-team football and was hoping for a January loan deal.
Reading hope to bring him in to stop their mini-slide after what was a very promising start to the Championship season.
The Royals would face plenty of competition from The Championship and across Europe however they currently have a good working relationship with Chelsea.
Manager Steve Clarke used to work at the club and the likes of Lucas Piazon, Nathan Ake, Nathaniel Chalobah and Michael Hector are currently or have been on loan at the club from Chelsea.
Any deal would however be dependent on Chelsea deciding they have sufficient cover in the first-team if Loftus-Cheek does make a temporary move away.