Need some help understanding the details of your offer? See below for a breakdown of each one:
- Loan Amount
- Interest Rate (Variable)
- Loan Repayment Term
- Estimated Monthly Repayments
- Pre-Approved Amount
This one is easy – it’s the amount we’re able to loan you for the upcoming period of your studies.
If you’ve asked us for more funding for future study periods (for example, next year’s tuition) and you’ve qualified for those, we’ve also included a pre-approval for that amount. But not to worry if you didn’t ask for those funds in this application. You can always apply for them before the start of your next academic period. You’ll read more about your pre-approved amount below.
Interest Rate (Variable)
Our interest rates are composed of two parts:
The first part is LIBOR (which is the base rate). It's a benchmark rate used by lenders around the world and is the variable element of your interest rate. We use a LIBOR rate that changes every three months, which means we can't predict the exact rate that interest will accrue on your loan (though the LIBOR rate tends to be quite stable). Read more about LIBOR here.
The second part is called the margin rate and will stay the same throughout the life of your loan. This is the rate determined by Prodigy Finance based on your application.
The Annual Percentage Rate (APR) is a metric used to compare one loan offer against another. This shouldn’t be confused with your estimated interest rate. It helps you compare apples to apples by taking into account all of the costs of funding that you’ll need to cover. Those costs
include the interest rate, the effects of any compounding interest, and any administrative or origination fees. For a breakdown of APR, click here.
Loan Repayment Term
This is the equivalent of saying “how long will you be making regular payments?”. If you paid your loan installments exactly on schedule, you would make repayments over the course of either 7 years, 10 years, or 15 years. Interest will accrue during the grace period but your repayments will only need to start when this period is over. If you want to start repayments before this or want to pay off your loan earlier, you won’t be penalised - in fact, you will end up paying less overall.
Estimated Monthly Repayments
This amount is how much you should expect to pay each month. It’s an estimate because your monthly payment will change slightly according to the LIBOR rate, as explained previously. Remember that your repayments will be in the same currency as your loan, so if you plan to earn in a different currency you’ll need to convert the funds before sending them to our bank account.
Want to know a bit more about this? Click here.
This refers to the amount we’ve conditionally pre-approved towards the next part of your studies. You’ll need to complete another application with us at least a month before the start of your new academic period – but the earlier the better!
Why another application? As a responsible lender, Prodigy Finance will always assess your credit standing, liabilities and access to additional savings before the start of any new period. We’re looking out for you, and want to make sure you can effectively fund your entire course without the risk of over-indebtedness after you graduate. It’s also an opportunity for you to share important changes to your financial situation and to make any adjustments.
What can you do to make sure your pre-approved funds stay secure?
- Keep your credit profile in good order – make sure you’re paying off any debts on time.
- Be careful about taking on additional debt that didn’t show up in your original loan application - we’ll need to adjust our offer accordingly if you do.
- Your financial position should remain the same – no changes in your post-study salary if you have one, unless you get an even better offer and Prodigy Finance can potentially give you a better loan!
- If you’re a part-time student, you need to stay employed and remunerated at the same level or better.
- We need proof of the non-debt funds you declared in the budget section of your application which are earmarked for your next academic period. If you’ve set aside funds for the next part of your course, make sure they’re still available when you need them.