The interest rate is calculated by combining your fixed margin % with the current 3-month Libor (base rate) %. Interest is calculated monthly on the balance of your total loan amount outstanding.
The base rate % is adjusted each quarter according to the relevant currency of your loan (i.e. USD Libor, GBP Libor, or Euribor. 3-month Libor rates are updated on 8 January, 8 April, 8 July and 8 October of each year.
Prodigy Finance has two types of interest that are applied to our loans: compound interest and simple interest.
Depending on the agreement applicable to your loan, interest will be calculated as either one of the below:
- Simple interest calculated daily, and charged monthly, on the outstanding principal balance only.
- Outstanding principal balance x (margin + base) /365 x the days since your last transaction or days in the monthly cycle
- Compound interest calculated monthly, and charged monthly, on the full outstanding balance at the beginning of the cycle
- Interest = outstanding balance × ((margin + Libor)/12)