24 August 2023

Study abroad loans | Pros and cons of a Prodigy Finance loan

Prodigy Finance study abroad loans

In today’s competitive educational landscape, pursuing higher studies often comes with a significant financial burden where students are forced to take study abroad loans but one of the good options is a loan from Prodigy Finance (Photo: Pixabay).

Prodigy Finance is a fintech company that specializes in providing international student loans.

We will delve deep into the pros and cons of taking a student loan from Prodigy Finance, along with real-world examples.

Pros of Prodigy Finance student loans

Globally available

Prodigy Finance caters to students from around the world, enabling them to study in prestigious institutions across various countries. This is particularly beneficial for those pursuing specialized courses.

For instance, Ramez, an aspiring computer scientist from Brazil, secured a Prodigy Finance loan to study at Stanford University in the United States.

No co-signer or collateral required

Unlike traditional loans, Prodigy Finance offers loans without requiring a co-signer or collateral. This is a major advantage for international students who may not have local co-signers or significant assets to pledge as collateral.

Basher, a medical student from Egypt, was able to pursue his dream of studying medicine in the UK without burdening his family with financial obligations.

Flexible repayment options

Prodigy Finance understands the financial constraints students face during and after their studies.

The company offers flexible repayment plans, allowing graduates to make manageable payments based on their income.

This flexibility eases the transition from student life to the professional world.

As an illustration, after completing his MBA at INSEAD, Alan structured his repayment plan with Prodigy Finance to align with his start-up’s initial growth phase.

Interest rates linked to local currency

Prodigy Finance ties interest rates to the local currency of the student’s institution.

This feature shields borrowers from the risk of fluctuating exchange rates, providing financial stability throughout the repayment period.

Priya, an engineering student from India, chose Prodigy Finance for her studies in Australia, appreciating the stability this offered amid currency market uncertainties.

Cons of prodigy finance student loans

Higher interest rates

While Prodigy Finance loans are convenient, they tend to have higher interest rates compared to some government-funded student loans. As a result, borrowers may end up paying more in interest over the life of the loan.

Jeremy, a graduate student from Canada, opted for a government loan due to its lower interest rate despite Prodigy Finance’s attractive features.

Study abroad loan details

For instance, Devi from India had taken a Prodigy loan in August 2023. Here are the details of her loan (approximate figures):

Loan amount $52,000

Interest amount: 13.7 per cent

Total repayment: $198, 225

Loan term: 20 years

Equated monthly instalments (EMIs): $830 for 239 months

Payment start date: Two years after completion of studies (If you start paying earlier, your interest rate and EMI will come down substantially)

* In case, the student files for bankruptcy, the amount to be paid may come down substantially and the new sum to be paid will be decided by the company.

Limited loan amounts

Prodigy Finance sets loan limits that may not cover the full cost of certain high-priced courses or programs.

Students pursuing fields with high tuition fees, such as medicine or law, may find themselves needing additional funding sources.

For example, Miranda’s decision to pursue a law degree in the US led her to explore alternative loan options due to the loan cap imposed by Prodigy Finance.

Variable repayment terms

Although flexible repayment is a plus, it can also be a con for some borrowers who prefer fixed repayment terms.

The variability in repayment amounts based on income can make it challenging for individuals to budget their post-graduation finances accurately.

Dave, an engineering graduate, felt uneasy about uncertain monthly payments and chose a lender with fixed repayment terms.

Eligibility criteria and availability

Prodigy Finance has specific eligibility requirements, and not all students may qualify for their loans.

For instance, it sees the university rank and tries to determine employability of the particular course before sanctioning loans.

Additionally, Prodigy Finance may not cover education institutions in every country or every field of study.

Taking a study abroad loan from Prodigy Finance can be a game-changer for many students, who want to study abroad, without the hurdles of traditional financing.

However, it’s crucial for students to carefully weigh the pros and cons before committing to a study abroad loan from Prodigy Finance.

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