Education Loan

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

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

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

GyanDhan
Rohit Gidwani
Updated on:  28 Jun 2024  | Reviewed By: 
Aman 
| 4.33K | 10  min read

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.

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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:

Basis of difference MPOWER Financing Prodigy Finance

Interest rates*

 12.99% (13.98% APR) - 15.99% (17.08% APR) 

Interest rate: 11% - 14%

Interest rate type

Fixed

Floating

Interest rate discounts

0.25% (on autopay**)

No discount

Target country (to where you want to go)

USA and Canada

Majorly USA and Canada but also have some universities from UK, Australia, Ireland, and 14 more countries.

Number of schools supported

400+

1100+

Repayment 

Full simple interest during the study period + 6 months

Full free moratorium during study period + 6 months;

EMI will start after 6 months, of course

Loan tenure

Up to 10 years

Up to 20 years

Programs supported

Bachelors and Masters

Only Masters

Eligibility 

Provides loan for a maximum of 2 years of courses only and for the last 2 years of bachelor's degree.

Provides loan for masters STEM courses only

Additional services

Loan top-up*** (Avanse and Incred), Path2Success Program (career guidance), conditional offer letter, and scholarships

Only loan top-up (Avanse and Incred)

Loan Approval Basis GRE / GMAT? 

No

No

 

*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.

Check Your Education Loan Eligibility

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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.

  • list items MPOWER Financing offers fixed interest rates for their loans, ensuring that the rate remains constant throughout the loan tenure.  
  • list items 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.
  • list items 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%.
  • list items 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.
  • list items 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.
     

    Did you know?

    MPOWER Financing does not charge any processing fees for any course or country listed while Prodigy Finance has started to charge approx USD 100 for some courses on their list.

     

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    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.

  • list items 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.  
  • list items 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. 
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    Tough choice to make? Watch our comparitive video on top international lenders to get loan

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    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.

  • list items 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.  
  • list items 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. 

    Did you know?

    MPOWER Financing requires applicants to maintain a specific savings amount as financial proof which is approximately 5 - 6 Lakhs INR, while Prodigy Finance does not have such a requirement.

    Check Your Education Loan Eligibility

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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 - 

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

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

    What is the typical loan repayment period offered by MPOWER and Prodigy?

    Loan repayment can be defined as the time that has been provided to you to repay the loan back to the lender. For MPOWER Financing it can be around 10 years but in the case of Prodigy Finance, it can range between 15 - 20 years. 

    Are there any additional fees or hidden charges associated with MPOWER Financing?

    There are no hidden charges but there is a cost that is called origination fees in case of MPOWER Financing that you should be aware of. You can consider it as a processing fee that is taken by Indian lenders. This origination fee is 5% of the disbursed amount and it is adjusted in the loan amount and you do not have to pay it upfront. You will be charged this origination fee on every disbursement you take from the sanctioned amount.

    Are there any additional fees or hidden charges associated with Prodigy Finance?

    There are no hidden charges in the case of Prodigy Finance but there is a 5% admin fee that is included in the approved loan amount and spread across your loan tenure to be paid back with EMIs. 

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    Which lender, MPOWER or Prodigy provides a better interest rate for abroad education loans?

    For both lenders, the interest rate is relatably similar but the main differentiating factor between these lenders is the nature of interest rate. MPOWER Financing has a fixed interest rate while Prodigy Finance has a floating interest rate. Depending on your requirements and risk-taking ability you can choose the lender.

    Does Prodigy Finance provide abroad education loans for Bachelor programs as well?

    No, Prodigy Finance’s main focus is providing abroad education loans for majorly Master’s STEP programs and a few Non-STEM programs as well.

    Check Your Education Loan Eligibility


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