Why can’t I find the EMI on my Prodigy Finance loan?
Prodigy Finance uses APR, not EMI, on their variable interest rate international student loans so you can compare products. Find out how to use APR.
Wondering why Prodigy Finance doesn't have much to say about EMI? Looking for it on your provisional loan offer and can't find it?
If you’re considering an international study loan with Prodigy Finance, you won't see the same metrics as you would on a local study loan.
Take a moment to find out why and why Prodigy Finance uses APR instead.
Need an answer to your questions quickly? Jump to these sections:
EMI and fixed-rate loans
Work out EMI using this equation:
(P x I) x ((1 + r)n)/ (t x ((1 + r)n)- 1)
P – principal amount borrowed
I – annual interest rate
R – periodic monthly interest rate
N – number of monthly payments
T – 12 (number of months in the year)
Borrowers can use EMI to compare loans provided the number of monthly payments is equal across all loans in question. Or, if the total amount is more important, you can consider that figure before dividing by the repayment duration.
Limitations of EMI
Prodigy Finance uses APR
If you expect fixed-rate loans because that’s the norm of your home banking system, you might expect to see EMI on your loan documents.
But you won’t find it in your Prodigy Finance provisional loan offer; EMI can’t be used as there is a variable base rate - which is common across the world's strongest markets.
Instead, Annual Percentage Rate (APR) is used on Prodigy Finance loans.
What is APR?
APR is similar to EMI as it is a means of comparing apples to apples. It's expressed differently, but it’s still a means of comparison.
But, it’s different from EMI because APR can represent variable interest rates.
Prodigy Finance, for example, provides loans with a LIBOR base. Your interest rate changes according to LIBOR fluctuations for the currency of loan dispersal.
Practically, this means that repayment amounts change over time. The minimum repayment amount you pay this month may be different than your expected contribution next month. Loans are recalculated every month based on the current balance and the current interest rate.
Benefits of APR for loan comparison
Want to learn more about financing your international education?
Prodigy Finance offers you competitive loans that are breaking traditional barriers and affording you the opportunity to achieve more.
Prodigy Finance Ltd is authorised and regulated by the Financial Conduct Authority.
What next? Find out more about Prodigy Finance’s education loans or check out the list of schools we support.
For any other information about Prodigy Finance, or our student loan process, feel free to check out or browse our site, or register for a webinar to have your questions answered by one of our team.
Post updated for accuracy and freshness on November 4, 2019. Originally published on March 22, 2018.
