Secured Overnight Financing Rate (SOFR)

The interest rates of the student loans offered by Prodigy Finance track various SOFR rates:

• Loans finalised after 30 June 2023: 30-day Average SOFR (from 8 January 2024)
• Loans finalised after 30 July 2017 and prior to 1 July 2023: 3-month CME Term SOFR*

* Loans finalised from 1 July 2023 to 7 January 2024 were switched to the 30-day Average SOFR benchmark on 8 January 2024.

If you have multiple loans with Prodigy Finance, your loans may track different base rates, depending on when they were finalised and the currency of the loan.

We adjust the variable interest rates of our loans quarterly on 8 January, 8 April, 8 July and 8 October tracking these benchmarks published at the end of the previous business day. If the base rate is less than zero percent, we will apply zero percent for purposes of calculating the interest rate.

The interest rates of the student loans offered by Prodigy Finance track various SOFR rates:

What is SOFR?

SOFR is based on the rates that financial institutions pay one another for overnight loans or repos and is published daily by the Federal Reserve Bank of New York (Fed). In 2017, the Federal Reserve formed a group of large financial institutions known as the Alternative Reference Rate Committee (ARRC) to work on finding an alternative to LIBOR. They ultimately chose SOFR and this choice was endorsed by the UK Regulator, the Financial Conduct Authority.

30-day Average SOFR

The 30-day Average SOFR is the benchmark rate that we applies from 8 January 2024 to the interest rate of all loans finalised after 30 June 2023.

30-day average SOFR is a benchmark interest rate based on SOFR. The SOFR 30-day average rate is calculated as the average of the SOFR rates observed over a 30 calendar day period. It is used as a benchmark for various financial instruments, including student loans.

Check out the 30-day Average SOFR rates published daily by the Federal Reserve Bank of New York. As a reminder, we adjust the variable interest rates of our loans quarterly on 8 January, 8 April, 8 July and 8 October tracking these benchmarks published at the end of the previous business day. For instance, we used the rate published on 5 January 2024, to review the benchmark on 8 January 2024.

Why the switch for loans finalised from 1 July 2023?

We’re adopting the 30-Day Average SOFR rate as it’s the recommended benchmark by the Fed (based on the recommendations by ARRC) for student loans finalised after this date and is commonly applied by lenders in the credit industry.

Will my interest rate change?

3-Month CME Term SOFR and 30-Day Average SOFR are different benchmarks with different calculation methodologies, but as both are based on SOFR the gap between the rates is minor and the switch should not cause any material change to the interest rate for your loan. The new benchmark rate and the impact on your total interest rate are confirmed on 8 January 2024, when we start using a 30-Day Average SOFR for our usual quarterly update of the benchmark rates. Your February 2024 statement will disclose all the details of the new benchmark.

*SOFR and SOFR AVERAGES data is sourced from newyorkfed.org and is subject to the Terms of Use posted at newyorkfed.org. The New York Fed is not responsible for the publication of the SOFR and SOFR AVERAGES data by Prodigy Finance Ltd, does not sanction or endorse any particular republication, and has no liability for use.

3-Month CME Term SOFR

3-Month CME Term SOFR is the benchmark rate that we use for loans finalised after 30 July 2017 until 30 June 2023**.

3-Month CME Term SOFR is an indicative, 3-month forward-looking measurement of SOFR, based on market expectations implied from leading derivatives markets.

Below are the rates for the current and previous quarterly period that we apply:

** Loans finalised from 1 July 2023 to 7 January 2024 were switched to the 30-Day Average SOFR benchmark on 8 January 2024.

*The market data is the property of Chicago Mercantile Exchange Inc. (CME) or its licensors as applicable. All rights reserved, or otherwise licensed by Chicago Mercantile Exchange Inc. CME GROUP MARKET DATA IS USED UNDER LICENSE AS A SOURCE OF INFORMATION FOR CERTAIN PRODIGY FINANCE LTD (“PRODIGY”) PRODUCTS. CME GROUP HAS NO OTHER CONNECTION TO PRODIGY PRODUCTS AND SERVICES AND DOES NOT SPONSOR, ENDORSE, RECOMMEND OR PROMOTE ANY PRODIGY PRODUCTS OR SERVICES. CME GROUP HAS NO OBLIGATION OR LIABILITY IN CONNECTION WITH THE PRODIGY PRODUCTS AND SERVICES. CME GROUP DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF ANY MARKET DATA LICENSED TO PRODIGY AND SHALL NOT HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. THERE ARE NO THIRD-PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN CME GROUP AND PRODIGY. Visit CME’s website to find out more on 3-Month Term SOFR.

Terms of Use: The SOFR rates on this page are made available solely to Prodigy customers as a reference for the benchmark rates used in the interest rates of their loans. When viewing these rates, no Prodigy customer nor any visitor to the Prodigy Finance website may sell, licence, rent, modify, print, collect, copy, reproduce, download, upload, transmit, disclose, distribute, disseminate, publicly display, publicly perform, publish, edit, adapt, electronically extract or scrub, compile or create derivative works from any content or materials (including, without limitation, through framing or systematic retrieval to create collections, compilations, databases or directories) or otherwise transfer any of the content on this page to any third person.