Prodigy Finance Education loan

✓ Education Loan to Study Abroad

✓ Interest rate starting at 10.50%

Speak with a Financial officer

Due to high number of loan requests from your region, we are not accepting any new applications at the moment. We believe in offering quality service to our customers.

Sorry for the inconvenience caused.

Table of content

  1. Prodigy Finance Education Loan Scheme
  2. Eligibility of Prodigy Finance Education loan
  3. Comparing Prodigy Finance Education Loan with Indian Lenders
  4. How To Apply For An Education Loan Through Indian Lenders
  5. Benefits of WeMakeScholars
  6. FAQ's
  7. Need Help? Ask Here!

India’s Largest Study Abroad Funding Expo (SAFE) 2024

- Explore 26,000+ International Scholarships

- Instant Education Loan-pre approval with the lowest interest rate in India

Prodigy Finance is a trending finance option among Indian students looking to study abroad. Prodigy Finance was submissively serving Indian study aspirants over the last few years until they got this massive funding of $240 million in August 2017 and that made this community lender take this big leap to transform into a commercial lender.

So, when we say commercial lender, we stress two things. One, they went from supporting a niche list of top schools to more than 850 schools by massively increasing their list, which is good for all of us and good for Prodigy Finance because now they tap a bigger market. And second, they increased their interest rate from an average APR of 10% to an average of 14.20% to mitigate their risk because now they fund many lower-ranked schools than earlier.

Prodigy Finance has advantages such as a hassle-free online process with no co-applicant and no collateral required. Primarily, students approached WeMakeScholars for a loan from Prodigy Finance when they didn’t have collateral and no co-applicant. For such students, we always recommended Prodigy Finance, which was slightly better than others in the market.

But recently, when the trend started shifting towards US lenders portraying themselves as a better option over the Indian Public Banks, we thought of bringing deeper insight than what looks better on the surface.

Prodigy Finance Education Loan Scheme

Prodigy Finance offers education loan amounts depending on the student's requirement, starting at an interest rate of 10.50%. Here are the other details of the Prodigy finance education loan scheme.



Loan Amount

As per applicant's requirement

Rate of Interest

Starts from 10.50% 

in foreign currency

The actual rate depends on student's profile

Processing Fees

 5% of the loan amount

Moratorium Period

Course duration + 6 months

Repayment Tenure

Maximum up to 20 years

Collateral Required



Eligibility of Prodigy Finance Education loan

Prodigy Finance offers education loans to international students at postgraduate level programs at selected universities. The loan is usually unsecured, meaning no collateral is required. The loan amounts vary but typically range from 8 lacs to need-based depending on the student’s profile. The interest rate on a loan is variable and based on the applicant's creditworthiness. The loan repayment tenure typically ranges from 7 to 20 years.


Comparing Prodigy Finance Education Loan with Indian Lenders

Here is a tabular comparison between Prodigy finance and Indian unsecured education loan lenders.


Prodigy Finance Education Loan

Indian Unsecured Education Loan Lenders

Loan Amount


Maximum up to Rs 1 Cr 

With collateral, applicants can try for a higher amount

Interest Rate

Starts from 10.50% USD

Starts from 9.55% INR

Loan Margin

35% of the loan amount

Starts from 0% 

(Can vary depending on the profile)

Processing Fees

5% of the loan amount

1% - 2% of the loan amount

Moratorium Period

Course duration + 6 months

Course duration + 6 months 

In some cases extendable up to 1 year

Repayment Tenure

7 - 20 years

Maximum up to 15 years


In this section, We will be comparing the lenders based on 8 major parameters:

  1. Interest rate
  2. Processing Fee
  3. Floating Interest Rate 
  4. Disbursement 
  5. Income Tax Exemptions and subsidy schemes 
  6. Interest Rate Parity
  7. Loan Margin
  8. Credibility 

Interest rate

For some reason, Prodigy Finance shows 2 percentage figures on their quotation: estimated interest rate and APR, they mentioned the APR is the final interest rate after adding the US Libor and processing fee.

Now, many of you might not know that the Indian equivalent of LIBOR is MCLR (Marginal Cost of funds based Lending Rate- MCLR refers to the minimum interest rate of a bank below which it cannot lend, except in some cases allowed by the RBI). So how would it sound if I say SBI’s interest rate is 2.5% plus MCLR? Does it ever mean that you are going to be charged interest at 2.5%? 

So, you have to compare Apple to Apple and hence, Prodigy’s APR is what you have to compare with Indian banks rate of interest, not the misleading figure of “Prodigy’s Estimated interest rate”.

So, Prodigy’s average APR is 14.20% and Indian banks average interest for prime universities (all schools supported by Prodigy are in the Prime list of Indian banks) is 11.15% for Males and 10.65% for Females (inclusive of MCLR and processing charges). 

Now, the most important thing is "How is LIBOR changing or expected to change?". Prodigy's interest rate is low because LIBOR is at its lowest point in the last 10 yrs and is expected to increase significantly. 

Processing Fees

The processing fee of Prodigy Finance is 5% USD of the loan amount i.e for an average loan for the US of INR 40 lakhs, your processing fee will be INR 2 lac. You may not realize how humongous the processing fee of Prodigy Finance is because you don’t pay it upfront and it gets added to your loan and eventually you end up paying interest on your processing fee as well.

Therefore, it is quite clear that processing fees charged by Prodigy finance education loan are way higher than any Indian lender as it is calculated in USD and not INR.

Floating Interest Rate

The Annual Percentage Rate (APR) or effective interest rate for Prodigy Finance Education Loan is floating, it depends on the factors like 

  • LIBOR (London Interbank Offered Rate) values
  • Interest rate decided by Prodigy and
  • Other costs.

LIBOR is the average interest rate of all the foreign lenders and NBFCs present globally and varies dynamically with sudden change in the financial markets and banking sectors. The value of LIBOR has increased significantly from 2.95 to 5.72 in the first quarter of 2023 and is expected to rise further owing to the market recovery after Covid19 pandemic.

Therefore, interest rates charged by Prodigy Finance cannot be kept fixed. This is one of the major issues in taking an education loan from Prodigy Finance. So, consider this point before choosing your education loan lender.


Prodigy Finance has a policy that they disburse the loan amount semester-wise, which means an installment of disbursement from the total loan amount will get credited before the start of every semester. The catch here is that loan installment will only get disbursed if the student has performed well in the previous semester as per their loan conditions.

Moreover, the entire loan amount including tuition fees and loans for other expenses is disbursed only to the college or university’s bank account and then students will have to take the loan amount from the college or university. This extra step makes the process lengthy and increases the dependency on college for funds.

Income Tax exemptions and Interest subsidy schemes

Many of you forget the benefits you get as Indian nationals when you take a loan from an Indian bank. Under section 80E you can claim an exemption on the interest component of your loan. This means you can:

  • Save 30% of your interest if you or your co-applicant’s income is above 10 lacs, making your effective rate of interest as 6.33% (female students) and 6.68% (male students)
  • Save 20% of your interest if you or your co-applicant’s income is between 5-10 lacs, making your effective rate of interest as 7.24% (female students) and 7.64% (male students)
  • Save 10% of your interest if you or your co-applicant’s income is below 5 lacs, making your effective rate of interest as 8.14% (female students) and 8.6% (male students)

In addition, for minority communities, under the Padho Pardes scheme, Govt of India pays your interest for the moratorium period if you take the loan from a nationalized bank in India. A similar scheme exists for SC/ ST students called Dr. Ambedakar's interest subsidy scheme.

Note: Padho pardesh has been discontinued as of April 1st 2022, But the current beneficiaries as of 31st of March will continue to receive the interest subsidy throughout their term. 

Prodigy Finance cannot give you these benefits and hence an interest rate of 10% will be effectively 10% only not lesser than that. And as Prodigy Finance is registered in the UK, you cannot even get the benefit of building a Credit score in the US.

Interest Rate Parity

This is the toughest to explain, but the most important to understand. If you get it, you will realize 10% Rate of interest from a US lender is equivalent to 15% ROI from an Indian lender.

If you google Interest Rate Parity, you get this-  “It is a theory in which the interest rate differential between two countries is equal to the differential between the forward exchange rate and the spot exchange rate”. We know that it is full of jargon, in layman terms it means that you cannot simply compare the interest rate number of 2 loans that are in different currencies, there is modeling involved to drive how much interest rate of a USD loan is equal to Indian loan or vice-versa.

We’ve given an example of this below,

Let’s take a hypothetical case of a student who went to study in the US in 2011 (We considered the year 2011 as we have past data to prove the point). He took the loan in July 2011 (1 USD = 44 INR) of INR 44 lakhs ($100K). His course finished in July 2013 and in Jan 2014 he started repaying the loan.

Now in Jan 2014, 1 USD was equal to 62 INR and in the next 3 yrs, which the student took to repay the loan, 1 USD went to 69 INR in Dec 2016. If we consider the average USD-INR conversion for the period Jan 2014 to Dec 2016, it was 1 USD= 65 INR. 

Let’s assume the student took complete INR 44 lakhs in July 2011 which was $100K, at 10% interest rate, by Jan 2014, total repayable is INR 55 lakhs (principal plus 2.5 yrs simple interest) but at the rate 1 USD = 65 INR, student was able to pay back INR 55 lakhs with only $84,615. 

This is the benefit of borrowing in a cheaper currency, you borrow $100K and you return less than $85K. 

Now, if this student would have borrowed the same $100K from a US lender at 10% interest rate, his repayable in Jan 2014 will be $125K (principal plus 2.5 yrs simple interest). So, now you see the difference between both Indian bank and US lender is charging 10% interest rate, still, the student pays back $85K to Indian bank or $125K to the US lender. That’s why we start this point by saying a 10% loan in USD is equal to 15% interest rate in an Indian bank (after considering the FOREX deductions of 1% both ways). And wait, the worst will happen to you if by any chance you come back to India while you are still repaying your USD loan, you are GONE. You will be earning in a depreciating currency and hence, you will end up repaying double of the amount you borrowed.

Check out the USD to INR Education loan Calculator to get more clarity about the interest rate parity calculation.

 Loan Margin

Prodigy Finance can fund up to 100% of the total cost of attendance (i.e. tuition fee, living expenses and other costs) but that’s not what the stats look like. The average funding by Prodigy Finance is 65% of your total cost. Doesn’t sound that bad. Right? Because in most cases, a student barely needs 70% of their on-paper cost (i.e. I-20 amount).

But the catch here is if you take a loan from Prodigy Finance, the loan margin i.e the remaining 35% (e.g. INR 17.5 lakhs, if your total cost of attendance is INR 50 lakhs), has to be shown in the form of proof of funds, before the loan agreement for the first year. The same procedure has to be followed for every year. This can be a burden for students/parents to arrange the entire remaining amount. Contrarily, Indian NBFCs fund you 100% of the tuition, living, travel and misc expenses without the loan margin concept.

To add on, Prodigy Finance doesn’t approve your loan for the second year of your education if you are not showing the whole margin for 2nd yr in your account.


Moreover, another drawback is that Prodigy Finance is regulated by the UK Financial Conduct Authority, which means loans are regulated by English laws and the government of India does not have any authority to resolve any financial dispute if it arises before loan sanctioning or at the time of loan repayment. 

On the other hand, if you take a loan from unsecured education loan lenders in India then you will be assured of the lender's credibility as all Indian lenders are regulated and monitored by the Reserve Bank of India.

The average education loan amount which students take to study abroad is around Rs 40 lacs including tuition fees and other expenses. It is a big amount for many and therefore, we recommend you to not take risk and prefer only Indian lenders to take education loans.

How To Apply For An Education Loan Through Indian Lenders

You can apply for an education loan through Indian lenders by processing your education loan through WeMakeScholars as we are connected to most of the leading education loan lenders operating in India (14+ major Public banks, Private banks, and NBFCs). Our main objective is to provide unbiased funding solutions to aspirants looking for proper funds for their higher education in India or Abroad. 

We take care of the entire education loan application process for you, Free of cost! We don’t charge the students any processing fee and we are funded and supported by the Ministry of IT, Govt of India. 

We have a team of experienced and expert financial officers, who analyze your loan profile and provide you with detailed information about the various education loan products and connect you to the best education loan lender as per your eligibility. 

Benefits of WeMakeScholars

Digital loan application: We offer a digital one-click process to start your loan application that you can start anytime and from anywhere.

Lower interest rates: We feel proud to say again that we are partnered with more than 14 lenders in India and because of which we offer additional 0.5-2% interest rate discount to all students processing their loans with us.

Shorter processing time: We have a track record of sanctioning loans in 2-4 days from public banks and within 15-20 days from private banks after the applicant has submitted their documents on WeMakeScholars documents portal or in the bank.

End-to-end assistance: WeMakeScholars offers its loan processing services starting from application till loan repayment to smoothen the entire process.

Cashback offer: Along with all other perks students will also get a cashback of up to Rs 3000 on their education loan disbursement.

Education Loan FAQs

  • Who is eligible for a Prodigy Finance loan?

    International students who are enrolled in or have been accepted to a graduate program at a partner university of Prodigy Finance are eligible to apply for a Prodigy Finance education loan. But for all Indian students, there is always an option to take a loan from Indian lenders through WeMakeScholars, to study in their preferred college or university.

  • What are the loan terms and repayment options?

    Loan repayment tenure typically ranges from 7-20 years, and repayment begins 6 months after graduation. Repayment can be made through automatic monthly payments, with the option to make extra payments at any time without penalty.

  • What are the interest rates for Prodigy Finance Education Loan?

    Prodigy Finance Education Loan interest rate starts from 10.5%. However, their loans have variable interest rates that are based on the borrower's creditworthiness. Interest rates may be higher for borrowers with lower credit scores. On the contrary, Indian lenders provide education loans at cheaper interest rates comparatively.

  • Is a co-signer required?

    A co-signer is not required, but having one can improve your chances of getting approved and may result in a lower interest rate.

  • How do I apply for a loan in Prodigy Finance?

    To apply for a loan, you will need to complete an online application, providing information about your academic background, employment history, and financial situation. You will also need to provide proof of your enrollment or acceptance into a partner school. On the other hand, to take an education loan from Indian Lenders you just need to request a callback from WeMakeScholars.

  • What are the fees associated with a Prodigy Finance loan?

    There is a one-time processing fee of 2.5% - 4% of the loan amount, which is deducted from the loan proceeds. There are no prepayment penalties. But, Indian lenders charge only 1% - 2% of the loan amount as processing fees, so choose wisely.

Our Education Loan team will help you with any questions

Naresh Kumar
WeMakeScholars- supported by IT Ministry, Govt. of India.
Published: | Updated: