Need some help understanding the details of your offer? See below for a breakdown of each one:
Base Rate
- Variable interest rates fluctuate in line with a base rate which, typically, shifts in reaction to market factors. Base rates may also change in order to stimulate the market to shift in one direction or another. You may pay 11.85% interest for a period, then 9.5% for another. For further insight on our Base rate, please click here.
Margin Rate
- 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.
Interest Rate
- The interest rate is made up of two components: a fixed margin and a base rate, as discussed above.
- We use simple interest rates, meaning that interest does not compound throughout the life of the loan.
APR
- The total cost of borrowing can be expressed as APR (Annual Percentage Rate). APR reflects interest and all fees and the effects of any compounding.
- This means that APR is always a higher percentage than your interest rate, because it includes all costs. It's not the monthly rate at which interest accrues on your loan.
- We recommend using APR when comparing loan offers and costs from different lenders. Remember, any lender regulated in the UK or the US is required to provide you with APR.
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 penalized - in fact, you will end up paying less overall.
Pre-Approved Amount
- 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.
If you want any information related to the Prodigy Finance supported schools before you make your decision, or if the question is simply, “What loans am I eligible for?”, simply check out one of our Support pages or visit our Study Centre to read more about how Prodigy Finance can help you in the next stage of your career journey.
Also, if you have some questions about Prodigy Finance charging any hidden fees, whether your full cost of studies will be covered, whether forex rates will affect your interest, or if you’ll receive a tax break or not, here is an article that provides as good a Prodigy Finance review as possible.
For any other information about Prodigy Finance, or our student loan process, feel free to browse through our site or register for a webinar to have your questions answered by one of our team members before you apply for our student loan.