MPOWER Financing and Prodigy Finance: Which is Better for Education Loans?

In the last financial year ending in March 2023, there was a shift in the education loan landscape. According to the RBI, for the first time in five years, the growth in education loans not only returned to a positive trajectory but also recorded an impressive 17% increase. This can be attributed to two primary factors: the thriving number of students going to study abroad and the financial constraints they encounter.

If you are a study abroad aspirant, during your quest for education loans to support your study abroad plans, you may have come across the term "international lenders" who offer loans without requiring collateral or co-applicants. To simplify your research process and aid in your decision-making, we present a comparison of two prominent international lenders operating in the Indian market: MPOWER Financing and Prodigy Finance.

Comparative overview of education loans by MPOWER Financing vs Prodigy

MPOWER Financing and Prodigy Finance are major players in the international education loan sector. They provide loans in foreign currency, remove exchange rate costs, and don't demand collateral or co-applicants, focusing on future earning potential. Direct disbursement to universities is also offered. Both lenders have similarities in loan amounts and origination fees, but it's crucial to assess differences in interest rates, eligibility, and other factors to make an informed choice.

Let's see the general differences between these lenders:

*Interest rate as of January 2024
**Autopay: The amount of SI and EMI is deducted automatically from the designated bank accounts
***Top-up: to borrow more on an existing loan

Now that you have got an overview of the differentiating points between these lenders, let’s discuss these aspects in more detail.

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Difference in the interest rate of MPOWER Financing vs Prodigy

The interest rate can be defined as the cost of borrowing, expressed as a percentage while APR (Annual Percentage Rate) includes additional fees, giving a comprehensive view of the total loan cost. Comparing interest rates and APRs is important for evaluating loan offers accurately and identifying potential savings.

• MPOWER Financing offers fixed interest rates for their loans, ensuring that the rate remains constant throughout the loan tenure.  
• The interest rate for MPOWER Financing ranges from 12.99% (13.98% APR) to 15.99% (17.08% APR). The rates can be discounted by 0.25% if you sign up for an autopay that is the due amount for your loan will be dedicated from the designated account automatically.
• Many students view MPOWER's 13.72% APR as high due to factors like low credit scores and university choice, leading to a preference for INR loans. However, comparing INR and USD loans requires considering increases in initial rates, forex charges (2%-6%), insurance (1%-8%), and processing fees (0.5%-2%), potentially pushing INR loan APRs beyond 16%.
• In contrast, Prodigy Finance employs a variable interest rate structure, meaning the rate can fluctuate during the loan tenure. Prodigy Finance's interest rates can range between 11% - 14% and there are no interest rate incentives offered by Prodigy Finance.
• A new campaign has been launched by Prodigy, named the Fall 2024 Campaign, which is designed to offer special rates (starting at 12% IRR) to individuals with strong profiles. The aim is to reduce the interest rates for students, and the campaign is going live today. 

This leads you to two situations, that is in case you want to plan ahead your budget and then pay the EMI then MPOWER Financing is a good choice because they have a fixed interest rate but in case you want to take benefit of a reduced interest rate then Prodigy Finance will be a good choice as they have a floating interest rate thus it may go down and benefit you.
 

Acceptable universities and countries in MPOWER Financing vs Prodigy

International lenders like MPOWER Financing and Prodigy Finance have approved lists of countries, universities/colleges, and programs for their loans. Checking if your desired options are supported by the lender is crucial for eligibility and accessing financing options.

• MPOWER Financing focuses on providing loans for studying in the USA and Canada only while, Prodigy Finance offers loans for 19 different countries, including the USA, Canada, UK, Australia, Germany, Ireland, and more. Although the major focus of Prodigy is also on the USA and Canada, there are few schools in other countries that are eligible. Prodigy Finance's broader country coverage gives it an advantage in terms of international options.  
• Additionally, MPOWER Financing supports around 400 universities/colleges, while Prodigy Finance has a larger network, covering approximately 1,100 institutions. This wider range of supported institutions provides students with more choices and flexibility in selecting their preferred educational establishments. 

Difference in loan tenure and repayment between MPOWER and Prodigy

When comparing education loans for studying abroad, consider the loan tenure and repayment terms. MPOWER Financing and Prodigy Finance differ in these aspects, so it's important to compare their offerings.

• MPOWER Financing offers a loan tenure of up to 10 years. During the study period and the subsequent 6-month grace period, the borrower is required to make payments in the form of simple interest only.  
• On the other hand, Prodigy Finance has an advantage in terms of loan tenure. They can provide loans with a tenure of up to 15 years. Additionally, applicants may have the option of a full moratorium period, during which they are not required to make any payments, both during the study period and the 6-month grace period.

Eligible programs to get MPOWER Financing vs Prodigy education loan

MPOWER Financing extends loans for a maximum of two years of courses (for master’s), specifically targeting the last two years of a bachelor's degree. In contrast, Prodigy Finance focuses solely on providing loans for master's programs. Furthermore, Prodigy Finance places emphasis on STEM (Science, Technology, Engineering, and Mathematics) courses only while with MPOWER there are multiple courses that you can pursue.

If you are pursuing a bachelor's degree and require funding for the final two years, MPOWER Financing may be a suitable option. Conversely, if you are planning to pursue a master's degree, particularly in a STEM field, Prodigy Finance might be the more appropriate choice. 

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Additional Services by MPOWER Financing vs Prodigy 

MPOWER Financing offers several additional services that are not available with Prodigy Finance. Both have a common service which is loan top-up (to borrow more on an existing loan) but apart from it, MPOWER Financing provides few additional services. These value-added services provided by MPOWER can enhance the overall student experience and support their career development. A few of these services are - 

• Path2Success Program: Provides resume feedback and interview preparation sessions to support career development.
• Conditional offers: Facilitates the visa application process by expediting visa processing with a conditional offer.

MPOWER Financing vs Prodigy Which is better for you?

MPOWER Financing and Prodigy Finance are viable options for education loans without collateral or a co-applicant. MPOWER focuses on the USA and Canada, while Prodigy while Prodigy's main focus is also on these two countries but they also offer loan options for students from different countries. When choosing between them, consider factors like interest rates, eligible programs, and countries. Both lend in foreign currency (USD) but be cautious of exchange rate fluctuations impacting repayment costs. Opting for a loan in INR can offer long-term cost savings, regardless of future work location. 

You can read more about USD vs INR loans at GyanDhan’s discussion forum where study abroad aspirants have shared their personal experiences. Prodigy Finance will also charge a prepaid fee of 100 USD, which was 50 USD earlier 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.

The offering from both of them are quite similar yet it can make a difference if you end up choosing a lender that does not align well with your requirements. Suppose your university is listed on the list of both lenders then in the case where you want a fixed interest rate and shorter repayment period with no worries of paying SI during your moratorium period then you can go for MPOWER Financing. On the other hand, if you can manage a floating interest rate and need a loan tenure of about 20 years with a full free moratorium period then Prodigy Finance can be a great deal for you. 

It can be difficult to correctly evaluate the lenders and align them with your requirements. More than being difficult it is a time-consuming process and you are at this stage where you have to focus on other things like your visa. Do not worry, let GyanDhan help you, we have enough industry experience to help you choose the best lender that aligns with your requirements. All you have to do is check your eligibility with GyanDhan and sit back to experience a streamlined and hassle-free process for securing your abroad education loan.

Read also:

• MPOWER Financing Education Loan Disbursement Process
• Documents Required for Education loan
• MPOWER Financing Education loan
• Education Loan Without Parental Income
• Education Loan for Abroad Studies: Explore Student Loans
• Prodigy Financing Education Loan
• Avanse vs Prodigy

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