Avanse Vs Prodigy Finance Education Loan
Education Loan

Avanse vs Prodigy Finance: Which is Better for Education Loans?

Avanse vs Prodigy Finance: Which is Better for Education Loans?

On this Page:

Read GyanDhan’s comparative guide on Avanse vs Prodigy Finance abroad education loan to choose the right option for you. Compare the interest rates, loan amount, repayment terms & more.

GyanDhan

Mansi Bisht

Updated on: 03 Feb 2024

As the number of Indian students pursuing education abroad continues to rise, the education loan market has seen a corresponding increase in lenders. With numerous options available, choosing the right lender can be overwhelming. Suppose you find yourself in a tough decision: a loan with a co-applicant and a lower interest rate, or a larger loan without one, but with a slightly higher interest rate. Your choice will impact your academic journey and finances in the long term. To address this dilemma, we have created a comparative guide between two prominent lenders: Avanse and Prodigy Finance. This guide aims to assist students in making an informed decision while choosing a lender for themselves.

Sprinkles

Avanse vs Prodigy: Overview of differences

When it comes to financing your education abroad, it's important to explore different options and understand the differences between lenders. Two prominent names in the international education loan market are Avanse and Prodigy Finance. While both companies offer financial solutions for studying abroad, they have distinct features and approaches. In this overview, we will compare Avanse and Prodigy Finance, highlighting their key differences to help you make an informed decision when seeking an education loan.
 

Basis of Difference Avanse Prodigy

Type of lender

NBFC

International lender

Interest rates 

12% - 13.25%

11% - 14%

Maximum loan quantum

Up to 75 Lakhs INR

Up to 100,000 USD

Financial Co-applicant 

Required

Not required

Minimum income of co-applicant (without obligation)

35,000 INR - 50,000 INR

N/A

Processing fees

0.5% - 1% + GST

5% (adjusted in loan amount)

Repayment 

Need to pay either PSI or SI during the course + grace period. 

Full free moratorium during study period + 6 months grace period

Moratorium period

Course + 1 year

Course + 6 months

Programs supported

Masters and Diploma 

Masters only

Loan Approval Basis GRE / GMAT? 

Yes

No

 

From the above table, the major takeaway that can be evaluated is that in case you have a financial co-applicant with income that meets the minimum income criteria then it is a good option to go for NBFCs like Avanse in this case. This has been suggested as the interest rate that you may get will be less than compared to Prodigy. Then again when you get disbursement the loan amount will be in INR not in USD which will make it easy for you to repay considering the INR vs USD currency difference. 

Apart from it, there are several other flexibilities that you can get with Avanse but in the end, if you do not have a financial co-applicant then Prodigy is a better option to get an abroad education loan. Let’s understand all the basis of differences in depth for a better understanding. 

Sprinkles

Type of loans by Avanse and Prodigy Finance

Understanding the type of lender is crucial when selecting an education loan for studying abroad. It helps determine the specific services and offerings that the lender provides, ensuring a better fit for your needs.

The difference between Avanse and Prodigy in this aspect is:

  • list items Avanse is an NBFC that can provide you with a study abroad education loan but need a co-applicant. This will act as a security, but the disbursed amount will go into your account.  
  • list items On the other hand, Prodigy is an international lender that is they can provide you with an education loan without any co-applicant and collateral. The loan sanctioned will be directly transferred to the university.
Sprinkles

Avanse vs Prodigy: Maximum loan amount and interest rate

The maximum loan amount offered by a lender is an important consideration that can impact the decision-making process. A higher maximum loan amount increases the likelihood of covering 100% of your expenses. Additionally, the interest rate associated with the loan amount is another crucial factor to consider. Even a slight variation in the interest rate can have either positive or negative implications for the loan applicant.

The difference between Avanse and Prodigy in this aspect is: 

  • list items Avanse offers a maximum loan amount of up to 75 Lakhs INR for STEM courses in the USA. On average, they approve loans of around 40 Lakhs INR. The interest rate for these loans typically ranges between 12% - 13.25%.  
  • list items Prodigy Finance offers a maximum loan amount of up to 100,000 USD in foreign currency. The interest rate charged by Prodigy Finance typically ranges between 11% - 14%.  
  • list items There is a clear difference that is the currency of disbursed amount. Prodigy will disburse the amount in USD while Avanse will do it in INR. It is better to take a loan in INR as with the help of it the repayment becomes easier. You can join GyanDhan’s discussion forum to take part in INR vs USD discussion thread and get to know more about it.

 

Did you know?

In the case of Avanse, you would be required to take mandatory insurance that would cost around 2 - 4 Lakhs INR for which you would need to pay upfront while this is not required in the case of Prodigy Finance. 

Sprinkles

Co-applicant requirement in Avanse vs Prodigy Finance

When applying for an education loan without collateral, having a co-applicant becomes important, particularly with private banks and NBFCs. The co-applicant serves as a form of security, and the co-applicant must meet the minimum salary criteria.

The difference between Avanse and Prodigy in this aspect is -

  • list items Avanse requires a financial co-applicant to act as security for the loan. The co-applicant should meet the minimum income criteria, which typically ranges from 35,000 to 50,000 INR, without any additional financial obligations.  
  • list items On the contrary, Prodigy Finance does not require any co-applicant, and thus having a minimum income as an eligibility requirement is also irrelevant in this case.

Processing fees for Avanse vs Prodigy Finance

Processing fees can be a deciding factor when choosing between lenders. Higher fees increase the overall cost of the loan, while lower or zero fees can save money. Consider fees to assess affordability, utilization of loan amount, and compare loan offers.

The difference between Avanse and Prodigy in this aspect is -

  • list items The processing fees that Avanse will charge you can range between 0.5% - 1% plus GST. This is a one-time processing fee that you have to pay upfront based on the loan amount that you have been approved for.  
  • list items Whereas, Prodigy charges 5% of the disbursed loan amount as the processing fees which are also called administration or origination fees in the case of international lenders. Unlike Avanse, Prodigy will charge this fee on every disbursement.  
  • list items Prodigy Finance will charge a prepaid fee of 100 USD, which was earlier 50 USD once the loan has been approved. Only after the student pays this fee, a sanction letter will be issued. If an applicant decides to withdraw and submit a new application for a different school, they will need to pay the prepaid fees again for the new application. The fee already paid for the previous application will be directly refunded to the student. 

 

Get Guaranteed Best Loan with GyanDhan
Find a Better Loan Offer Elsewhere & We Will Cover the Difference in Interest

 

Sprinkles

Repayment and moratorium period for Avanse vs Prodigy Finance

Repayment and moratorium are vital factors when selecting a lender for an education loan. Understanding the repayment terms helps with financial planning and flexibility, while the moratorium period allows time before starting repayments. Evaluating these factors ensures a smooth transition and the ability to meet repayment obligations, impacting credit scores positively.

The difference between Avanse and Prodigy in this aspect is:

  • list items Avanse provides education loans to study abroad that would need an applicant to either pay Partial Simple Interest (PSI) or Simple Interest (SI) during the moratorium period is a course period plus one year.   
  • list items Conversely, Prodigy Finance does not require you to pay anything during the moratorium period (course period plus six months) in case you have a good application profile.

Avanse vs Prodigy: Programs supported

This is one of the important factors to consider when you are choosing between Avanse and Prodigy. In case the program that you are trying to get enrolled in is not supported then it is of no use to proceed with that particular lender. 

The difference between Avanse and Prodigy in this aspect is: 

  • list items Avanse offers education loans for a range of programs including masters and diplomas, to study abroad. In contrast, Prodigy Finance focuses specifically on providing education loans for master's programs abroad.  


From the above differentiative analysis, it is clear that the major factor that will make you either go for Avanse or Prodigy is the availability of a financial co-applicant that meets minimum income criteria. Apart from it, you can also consider Avanse if you are planning to do a diploma course as Prodigy only supports master's programs. In the end, it all comes down to the individual requirements that can help you make the choice.

Now that you are aware of the differences, begin your study abroad journey with confidence with either Avanse or Prodigy Finance by evaluating them with respect to your individual requirements. Find the ideal financing solution for your educational aspirations and take the first step towards international education. Don't miss this opportunity - check your loan eligibility now with GyanDhan for a seamless and hassle-free process to secure your education loan for studying abroad.

Read more about

Sprinkles

Frequently Asked Questions

What is the interest rate of Avanse and Prodigy Finance?

The interest rate for Avanse ranges between 12% - 13.25% and the interest rate of Prodigy Finance ranges between 11% - 14%. The interest rate that is given to an individual totally depends on the application and other variables like the target course, country, past academics, and more. 

Which lender has an easier loan application process - Avanse or Prodigy?

Considering the user convenience, almost both these lenders have pretty much the same application process that is done online. But if flexibility as a factor is considered then Avanse is better than Prodigy Finance.

What are some drawbacks or disadvantages of taking out a loan in USD?

Taking out a loan in USD can have several drawbacks. Firstly, currency exchange rate fluctuations can impact the repayment amount, leading to unpredictable costs. If the borrower's local currency depreciates against the USD, repayment becomes more expensive. Additionally, foreign exchange transaction fees may apply, increasing the overall borrowing cost.

Political or economic changes in the US can also influence interest rates, affecting the loan's affordability. Furthermore, currency risk and the potential for higher interest rates compared to domestic loans can add financial strain. Borrowers must carefully consider these factors before opting for a USD-denominated loan to avoid potential financial challenges.

Are there any pre-payment penalties involved with either Avanse or Prodigy Financing?

No, there are no pre-payment penalties in case you decided to foreclose your loan with either Avanse or Prodigy Financing.