Applying for a Prodigy Loan
To qualify for a Prodigy Finance loan, you must provide proof of acceptance to a participating school. The entire 20-minute application process takes place online, and within two business days, you’ll receive conditional approval, your interest rate and your loan amount. Once conditional approval is in place, you can accept the terms and provide supporting documentation and be on your way to your MBA. Once you arrive at school, you’ll digitally sign the loan agreement, and funds will be disbursed directly to the school. If your loan amount exceeds tuition, additional funds for living expenses will be transferred by the school directly into your bank account.
Loan Amount and Interest Rate Varies by Student and School
The amount you can borrow depends on the school you will be attending, but in general Prodigy’s threshold is 80 percent of the cost of attendance. The average Prodigy loan size is around $40,000, since not every student will qualify to borrow the maximum amount.
Prodigy uses a proprietary credit assessment model compiling multiple points drawn from your personal financial history to calculate a loan affordability score. Factors contributing to your individual score include your work history, pre-MBA salary, GMAT score and outstanding liabilities (such as credit card debt or prior student loans). Prodigy also requires two references, one personal and one professional, from each prospective borrower.
Prodigy uses these factors to calculate an individualized interest rate for each student, which will apply over a floating base rate. Prodigy loans range from a fixed rate of between 5.25 and 8.5 percent plus a variable rate. (Prodigy uses three-month U.S. LIBOR, which is 0.62 percent as of February 22, 2016). Your fixed rate will be determined by the details in your application plus information given to Prodigy by your school.
Students pursuing two-year MBA programs are pre-approved by Prodigy for the second year, but they do need to reapply after the first year. That said, a streamlined application process is scheduled to debut this month that will make the reapplication process much smoother and easier, Hirschfeld says.
Top-up loans—a second loan issued during the school year—are also available through Prodigy to students who require them. Top-up loans are common for students whose savings are impacted by currency fluctuations, for example, or whose summer internship plans create greater expense than anticipated, Hirschfeld says.
Repayment of the Loans
Students have 10 years to repay their Prodigy loans after graduation and a six-month grace period. Students can and often do opt to pay off their loans sooner, Hirschfeld says, especially since Prodigy assesses no fee or penalty for doing so.
Financing your MBA is, without a doubt, one of the greatest challenges facing prospective MBA applicants. But thanks to loan programs like Prodigy’s, students looking to study outside of their home country have more options than ever.
Learn more about Prodigy Finance.
