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Prodigy borrowers - your top 5 FAQs

Cresta Jakobi - March 18, 2014

Word FAQ written on a wooden block.

Students seeking out loans to finance their studies are bound to have numerous questions throughout the process, from ‘What documents do I need to provide?’ to ‘What happens if I repay early?’ Prodigy loan recipients are no different.

While our knowledge base is extensive and you’re likely to find the answer to almost any question you may have, we decided to compile a list of the Top 5 FAQs applicants ask us:

1. Can I change my loan amount after accepting my conditional offer? What happens if I do?

You can change your loan amount after you’ve received conditional approval from us. The only thing that will change is your administration fee – see each section below.

Reducing your loan amount

You can reduce your loan amount any time before you sign the final loan agreement, which happens when you arrive on campus for the start of class. If you have already paid your administration fee (which is due within 1 week of accepting your original loan offer), this is not a problem – you will simply need to request a refund of the difference in your administration fee.

Increasing your loan amount

You may also request an increase in your loan amount. However, a positive answer from us is not guaranteed. Our credit committee will need to approve your new loan amount, as well as assess if the funds are available, and we will answer your request as soon as we can. If an increase in your loan amount is approved, you will need to settle the difference of the increased administration fee, which is based on your final loan amount.

2. What documents are required as part of the loan application process?

There are quite a few documents that we require from you. Note that to process the loan, we can use electronic copies of the items listed below (which you must send us as part of your application). However, in order to disburse the funds you will also need to provide certified paper copies of the following:

  • Passport (certified copy)
  • Proof of residential address (certified copy)
  • Proof of salary (certified copies of payslips and corresponding month’s bank statements)
  • Proof of savings (for some applications – we will advise)
  • Proof of family support (for some applications – we will advise)
  • Proof of any scholarships or company sponsorships you may have
  • Credit report – Prodigy will source this wherever possible. However, in some countries, you will have to obtain this yourself and we will give you clear instructions on how to do this.
3. I don’t understand how my loan’s interest rates work – please explain.

There are 3 different ‘types’ of interest rates that are applicable for your Prodigy loan:

Simple interest rate

This is the interest rate you receive for your loan, plus the Euribor / Libor base rate, which varies every 3 months. For example, if you receive a loan offer of €40 000 at 7.2%, and the 3 month Euribor is 0.12%, your simple interest rate is 7.41% (7.2% + 0.12%). One twelfth (1/12) of this is added to your account balance at the end of each month.

Annual effective interest rate

The effective interest rate (EIR) also includes the effect of compounding during your study and grace periods (where you aren’t making payments). For this example, the EIR is 7.71%.

APR (annual percentage rate)

While the EIR takes the effect of compounding into account, the APR also takes all fees associated with your loan (ie, administration fees) into account. For this example, the APR of your Prodigy loan would be 8.18%.

Students who are considering different loan options should use the APR for the purposes of comparison.

4. When do the funds get disbursed? What if my tuition payment is due before Prodigy plans on disbursing the funds?

Disbursement dates of Prodigy loans can vary from school to school. In some cases, the funds are disbursed after tuition payment is due. But you can rest assured that Prodigy is in continuous communication with every school, and we have agreements in place that allow students to defer payment until the date on which the funds are disbursed.

However, depending on loan size and other payments due to the school, you may be required to pay a small portion of your installment before the disbursement date. This will need to be confirmed with your school’s finance office directly.

Please note that Prodigy loan funds cannot be used to pay any acceptance deposits or reservation fees required to secure your place at your school.

5. What happens if I repay my loan early?

There are no extra charges or penalties for early payments, or early settlement of your loan J. You will need to contact us, simply to notify us that you’ll be repaying early – especially if you wish to make payments while you’re still studying, or in the 6 month grace period after graduation. (More information on how to get in touch regarding this here.)

You can find more detail on each of these, and much more, on our knowledge base.

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