BBC Sport yesterday reported that a deal was close for the Chilean, with the Rs also confirming the signing of Leroy Fer from Norwich City later that evening.
"We are studying the possibility of a loan move," Vargas' agent Cristian Ogalde told Chilean radio station Cooperativa.
"I am in London and I will see how the negotiations progress. I am holding talks with Napoli, seeing what we are going to do with him [Vargas] and if we reach a final agreement or not. We are on the right path."
Elsewhere, QPR goalkeeper Rob Green says the club are much better prepared in their battle against relegation from the Premier League this term.
“It’s a different club, and that shows how quickly things in football can change,” Green told the club's official website. “It’s a completely different environment now, and maybe it was a case of taking one step back to help us take two steps forward.
“This season the spirit is there and the unit is as one. In that respect, you’d have to say we have more chance of surviving now than we did last time.”
The German has won just three of his 15 games in charge of the west London side and supporters are beginning to lose patience with his methods already.
Twitter was full of calls for Magath to be sacked after the 1-0 defeat to Wolves, while there were cries of 'Magath out' at Craven Cottage.
The Fulham boss has asked for more time in his press conference, stating that he has a young team that require patience.
However, questions are now being asked of his summer transfer business and inconsistent team selection.
So much so that Neil Lennon is just 2/1 to replace Magath with some bookmakers.
Should Fulham sack Magath?