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How 2 international students paid off their loans faster

Prodigy Finance - June 10, 2019

How 2 international students can help you pay off your loan faster


Want to repay your international student loan early? Want to do it without penalties?

It’s totally possible. It all depends, of course, on your loan provider - and, to some extent, where you live. 

How can you pay off your student loan earlier?

Pranay CS Spotlight

Pranay Agarwal

There are a couple of scenarios to consider when it comes to paying off your student loans earlier. They boil down to the situation you’re in and the flexibility your loan provider offers. For example:
  • Prodigy Finance customer Pranay Agarwal was interested in making earlier repayments - so early that he began making payments while studying his MBA at the Tippie College of Business at the University of Iowa. He knew from the beginning that he would do whatever it took to repay his international student loan long before his repayment cycle ends.
  • Maria Tamayo is another Prodigy Finance customer but she wants to make bulk payments to put a serious dent in the amount of interest she’ll pay over time. Although she didn’t make payments while pursuing her MBA at Nanyang Business School, as soon as she’s financially able, she’ll be paying more than the minimum every month until her loan is paid off. 

“I will definitely be paying more money every month once my financial situation allows for it. As the exchange rate increased substantially recently, I’m not risking paying way more than expected when I took the loan.” 

Both international graduates have the possibility to repay their entire loan early without any penalties.

Customer Spotlight Pranay quote

Are penalty-free prepayments the norm where you live?

In some countries, like Pranay’s home country of India, you’ll find there are usually penalties attached to early loan repayment. And, often, those penalties are steep enough to stop you from considering that.

In other countries, like Colombia where Maria comes from, there are laws in place to prevent banks and other lenders from charging prepayment penalties: if you accept a loan, you can repay it as quick as you like.

Where can you get a loan that doesn’t penalise you for early repayment?

If it’s the norm or the law in your country, you can always check with local banks.

And, with Prodigy Finance, you’re never penalised for early loan repayment. Never. In fact, we encourage you pay as soon as you’re able to.

Why should you think about paying your loan off sooner?

Why would Pranay and Maria want to repay their international student loans earlier? There are a couple of reasons (or, depending on how fast you can repay your loan, several thousand reasons):

  1. You’ll pay less on your student loan overall. The faster you pay, the less interest accumulates, so you pay less over the life of your loan.
  2. You can minimise additional international student loan costs. If you repay a student loan issued in the currency of your host country while still living and working there, you’re cutting out some of those FX and exchange rate risks. 

When should you start paying if you want to repay your loan sooner?

  1. If you’re like Pranay, you’ll start making payments as soon as you can. And that means well before your grace period expires.
  2. If you’re like Maria, you’ll begin as soon as you get that signing bonus and start earning with your new career. 

At Prodigy Finance:

Grace period = Payment holiday

You don’t need to make any payments during this time, not even on the interest.

In some countries, a grace period means you’ll make payments on the interest. When he accepted a Prodigy Finance loan, Pranay followed the norm in his home country and made these payments to reduce the interest he’ll pay over time.

In other countries - and with Prodigy Finance - grace period means you don’t have to make any payments until it’s over. Maria made the most of her grace period so she could maximise her budget while still studying

What will my loan look like if I pay early?

We can’t speak for other lenders, but if you accept an international student loan with Prodigy Finance, beginning payments early or paying more than the minimum cuts the total amount you’ll pay on your loan.

In both cases, you’ll be paying more than the minimum owed by a specific date. That reduces the amount of interest that accumulates on your loan and means your money will start hitting the principal balance of your loan faster (which subsequently reduces your interest).

But, you’ve still got options:

  • If you need to tighten your finances in the future, you can go back to paying the minimum due every month for the duration of your loan repayment cycle. Because you’ve paid more already, your monthly minimum due will be recalculated and you’ll need to pay less.
  • If financial freedom is your goal, then you can keep paying more than the minimum (which will be less every month thanks to that recalculation) until you’ve paid off your loan in full. 

For many international students and graduates, early loan repayments are just part of the plan. 

Whether it’s a matter of ensuring the loan is paid while living and working in your host country (before visa authorisation runs out) as is the case of Pranay, or simply because it penalty-free prepayments saves money off the total cost of your loan, it’s something to consider when accepting any international student loan.

Looking for specific answers?

If you’re curious about Prodigy Finance’s loan repayment terms and options, you may want to check out these guides:

    Want to know more about international student loan repayments?

    Join us for a webinar with a Prodigy Finance borrower who also had questions about the process - and the platform - and is now totally happy to answer yours. 


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