Prodigy Finance’s Co-Signer Loan Can Save You Money

When students look for education loan options to study abroad, they often wonder how a small difference of 1-3% in interest rate could impact their repayment structure. At first glance, this might seem negligible when taking the loan, but your future self will likely appreciate the savings.

So, don’t wait for your older self to send a warning from the future—read this blog till the end to avoid a financial mistake. After all, time machines are still a dream, and you can’t wait for one.

Overview: Prodigy Finance Co-Signer Education Loan 

Finance has been providing financial aid to students since 2007. They have assisted many in financing their overseas education, and recently, they introduced an additional option for students. They now provide an unsecured loan with a co-signer at an 8.37% interest rate. For a no co-signer and no collateral education loan, the interest rate is 9.35%, indicating a clear difference of about 1%.

Do you also think 1% insignificant? Maths might be with these calculations. Suppose you take an education loan of INR 20 Lakhs and opt for a full moratorium, meaning you pay nothing for 30 months. Over 15 years, your total repayment would be INR 33.4 Lakhs. However, by including a co-signer, the total repayment drops to around INR 30.7 Lakhs.

That’s a difference of approximately INR 3 Lakhs. While it might seem small at first, it has a significant impact when you relate it to your monthly EMI. If you want to make a well-informed decision based on your monthly income and total repayment, use our EMI Calculator Tool.

Advantages: Prodigy Finance Co-Signer Education Loan

Interest Rate:

Prodigy Finance is offering an 8.37% interest rate for unsecured loans, but in India, education loan interest rates range between 8.01% to 12%, even with collateral. For no-collateral loans, the interest can go up to 13%. For NBFCs, rates often go beyond 13-14%, especially without collateral or a strong co-signer.

In comparison to other lenders, you can save a significant amount on your education loan over a tenure of 15 years. This proves that even a slight decrease in interest rate percentage can translate into large monetary savings over time.

Co-signer Inclusion:

Adding a co-signer to an education loan adds security for the lender. This helps you take advantage of flexible repayment options and also gives you leverage during negotiations. A co-applicant can influence:

• 
  Lower interest rates (as in this 8.37% offering)
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  Greater loan approval chances
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  Better repayment terms

With Prodigy Finance's co-signer loan, borrowers from over 150 countries can access more favorable loan conditions than many unsecured loans.

Transparency:

Prodigy Finance is a collateral-free education loan, as it provides unsecured education loans. This widens the eligibility criteria for education financing without needing collateral. They charge a processing fee of 4% of the loan amount, which gets added to the principal. Therefore, no upfront payment is required except for USD 500, which is needed to get a sanction letter and visa approval.

They also disburse the education loan in USD, so in many institutions, you don't pay and include the currency conversion charges. For instance, if you're studying in the U.S., repaying a loan in USD avoids the 2-5% forex markup and exchange rate volatility you would face repaying an INR-denominated loan.

Repayment Options:

Prodigy Finance provides a grace period of 6 months on top of the 2 years of your course. This provides you time to look for the employment opportunities before thinking of the repayment. However, they require a monthly payment of USD 100 during this grace period in the co-signer loan scheme.

An interesting feature is that they don't charge extra for prepayment of the education loan. This flexibility reduces stress and avoids penalties, contributing to overall savings.

Build a Global Credit:

Prodigy Finance is an international lender helping you build a credit history, especially for students pursuing their studies in the U.S. It also assists with obtaining financial support while settling down.

In contrast, many local lenders don't report internationally, which limits your financial footprint abroad.

Comparison Between a Prodigy Co-signer and a No Co-signer Loan

While both the no co-signer and the co-signer education loan are appealing but you need to decide between the two. Below is a comparison to help you make an informed decision:

Calculation of Interest Rate

Understanding the interest rate calculation of Prodigy Finance is crucial. During the moratorium period, the interest rate is calculated based on simple interest; this shifts to compound interest when the moratorium period ends.

However, for the co-signer education loan, the co-applicant has to pay USD 100 during the initial 30 months. It reduces the accumulated interest rate, effectively lowering the principal that would be carried into the compounding repayment phase. This structured approach makes Prodigy’s repayment plan student-friendly and significantly cuts down the total repayment burden over time.

Conclusion

Prodigy Finance’s co-signer loan at an 8.37% interest rate is a smart choice that can help students avail financial assistance at a low cost with flexible and transparent education financing. The repayment of USD 100 monthly during the moratorium period also helps students take advantage of substantial overall savings.

If you are evaluating your education loan options and want to make the best financial decision, take the help of GyanDhan. We are India's first education financing marketplace, offering expert guidance, lender comparisons, and end-to-end support. So, apply for the Prodigy Finance loan via GyanDhan by checking your Loan Eligibility.

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