Prodigy Finance assesses your future earning potential based on the information provided in your application, data provided by the schools we support, and data from our past customers.
The result is a unique credit model that allows us to offer you competitive rates without requiring a guarantee in the form of collateral or a co-signer.
What is the interest calculation?
We use simple interest rates, meaning that interest does not compound throughout the life of the loan. The interest rate is variable, and is made up of two components:
- a fixed margin, determined by Prodigy Finance
- a variable base rate, we use 3-month LIBOR as the base rate.
In addition to the interest rate, there is an admin fee for each loan we issue. The maximum admin fee is 4% of the total loan amount. This fee is added to your loan amount when the loan is issued and spread across your monthly payments- you're never required to pay this fee upfront.
For example, if you take a loan for USD 40,000, the maximum admin fee will be USD 1600. A total of USD 41,600 will be sent to your school. This is considered your opening balance and during each month of your study and grace period, interest is calculated on this opening amount. Once your repayment period begins, the interest accumulated during grace is added to your balance, and any new interest is then calculated on this new opening balance.
Using APR as a comparative tool for your loan
The total cost of borrowing can be expressed as APR (Annual Percentage Rate). We recommend using APR when comparing loan offers and costs from different lenders. APR reflects interest plus all fees and the effects of any compounding.