What's Annual Percentage Rate for Education Loan & 9 other FAQs

Fiona

Dec 5, 2022

4.6k views

You asked and we’ve answered. Here are the top ten questions you asked during Education Loan options webinar with Prodigy Finance.

1. How can Prodigy Finance offer education loans without a cosigner or collateral?

Collateral and cosigners aren’t a universal norm for education loans. While it may be the case where you live, Prodigy Finance has considered the norms of the most customer-centric loan processes from across the globe.

In addition, rather than just considering credit history, Prodigy Finance works with a Future Earning Model that looks at the income you’ll probably earn after completing your masters degree at your particular programme. Looking at your finances after graduation reduces your risk, allowing Prodigy Finance to extend loans without cosigners or collateral.

2. Can I get a lower interest rate if I provide collateral or cosigners?

The unique risk assessment model that Prodigy Finance developed and uses doesn’t require any collateral or cosigners - and we can’t accept them, partially due to the international structure of the company and its loan products.

Prodigy Finance provides competitive (and sometimes even lower) rates. But, if potential borrowers can secure better rates, and have the collateral to put against them, they should compare offerings to see what’s best for them.

3. Is there a maximum loan amount Prodigy Finance can provide?

Yes. But that amount varies depending on the programme and university you’ll be attending. In some cases, you’ll be able to borrow up to the full cost of attendance provided by the university (which may be different than your budget).

However, some schools have placed maximum limits which cover only the cost of tuition (less any scholarships or university aid) or allow only percentages of the total cost of attendance.

We’re upfront about the limits, and you can check the maximum Prodigy Finance loan amount for all supported programmes here.

4. Will my loan also cover living expenses?

It all depends on the programme you’re attending. Though it’s not universal, Prodigy Finance loans can usually cover living expenses for engineering programmes as well as the law and public policy programmes we support. Some business schools also accept Prodigy Finance loans for living expenses.

Your best bet is to check the loan information pages for the schools you’re interested in attending.

5. Is the approved loan sufficient to get through the visa interview without any other funds provided by me?

To secure an international study visa, you’ll need to demonstrate to the immigration officials that you have the means to cover the full cost of attendance during your studies.

Your Prodigy Finance loan is considered valid source of liquid funds for your i20 documentation, visa application or any other official paperwork. If the Prodigy Finance loan covers the full Cost of Attendance (Tuition + Living) then you may not require any other financial funds.

Students whose funding comes from a variety of sources will need to demonstrate all of them to immigration officials. The international student office at your university are well versed in what you’ll need to secure your visa and you can turn to them for help with specific questions you might have.

6. When is the best time to apply for a loan, and how long is the processing time?

It’s always best to apply for a loan as soon as you have applied to programmes and are awaiting/received admits. All loans have processing times, and international students also have visa applications to deal with.

To apply for a loan with Prodigy Finance, you need to submit an initial application. We provide instant conditional approval for qualified applicants. This offer is valid for two weeks, and after you accept your offer we’ll need to verify the documents you upload so we can finalise your loan agreement.

A unique feature of your Prodigy Finance loan is the ability to reduce the amount up until you sign your final loan agreement when you arrive on campus. If you receive scholarships later on, you can reduce your loan accordingly, giving you no reason to hold off on your loan application.

7. What documentation is required to apply for the loan?

You won’t need to provide Prodigy Finance with documents until you’ve received your preliminary loan offer. The loan application process is handled completely online, so if you’ve been provisionally approved for a loan, you’ll need to upload:

Proof of Identity
Proof of Admission
Credit Report
Proof of Address
Proof of Income
Proof of Savings (if applicable)
Proof of Scholarships or Company Sponsorship (if applicable)
Financial Aid Form (if applicable)

If you have any questions about any of these documents, you can easily find information on the Prodigy Finance FAQs page.

8. Can you explain APR? Is it the interest rate?

APR stands for Annual Percentage Rate and it includes both your interest rate and the cost of any fees attached to your loan. APR is useful for comparing loans with one another as it’s too easy to fall for a low-interest rate loan that ends up being more expensive than competitors due to the fees.

In countries like the US and UK, APR is legally mandated as it provides consumers with the most complete cost of their loan. If you’re not used to seeing or using APR, this helpful guide will answer any questions you have.

9. What factors do you consider for setting the fixed margin portion of the rate for the loan?

Prodigy Finance uses LIBOR as a base rate for all loans, with a personal fixed margin that floats on top of that. Together, the variable base rate and the fixed margin make up your interest rate.

The fixed margin looks at your employment history, any debts or assets you may have, your credit history. Prodigy Finance also looks at your future earning potential; you know your masters degree will change your financial future and so does we.

Understanding these aspects of any loan is so important that you should ask as many questions as you need to feel comfortable with your financing options, and we suggest reading this guide first.

10. When do I begin repaying my loan?

Loan repayments for full-time students begin six months after the class end date. For borrowers attending part-time, repayment begins three months from the final disbursement date.

Remember, there are no penalties or fees for early repayment of your Prodigy Finance loan, and you can make payments sooner or pay more than the minimum due to reduce the total cost of your loan.

Have a question that we haven’t answered? Take a look at the Prodigy Finance FAQ pages to see if someone else already wondered about that. Or, send an email to info@prodigyfinance.com and we’ll get back to you quickly so you can get back to what’s important - securing an admit and making the most of your international education.

This article is a part of Prodigy Finance's FinLit series of webinars and blog articles. Read the rest of the articles here:

Get your overseas education funded. Get a loan quote under 20 mins today!