According to the 'Guardian', James is keen on a move to the Premier League, and Chelsea are interested in bringing the attacking midfielder to Stamford Bridge.
However, Real Madrid would prefer a permanent deal for the out of favour Colombian and would like a transfer fee of £60m.
James has fallen down the pecking order at Real Madrid and game time will be limited due to an abundance of high quality attacking options at the Bernabeu.
Besides Ronaldo, Bale and Benzema, Madrid also have Alvaro Morata, the in-form Marco Asensio, Lucas Vazquez and Isco who stand in James' way at the Champions League winners.