Avanse vs Prodigy Finance: Which is Better for Education Loans?

As the number of Indian students pursuing education abroad continues to rise, the education loan market has seen a corresponding increase in lenders. With numerous options available, choosing the right lender can be overwhelming. Suppose you find yourself in a tough decision: a loan with a co-applicant and a lower interest rate, or a larger loan without one, but with a slightly higher interest rate. Your choice will impact your academic journey and finances in the long term. To address this dilemma, we have created a comparative guide between two prominent lenders: Avanse and Prodigy Finance. This guide aims to assist students in making an informed decision while choosing a lender for themselves.

Avanse vs Prodigy: Overview of differences

When it comes to financing your education abroad, it's important to explore different options and understand the differences between lenders. Two prominent names in the international education loan market are Avanse and Prodigy Finance. While both companies offer financial solutions for studying abroad, they have distinct features and approaches. In this overview, we will compare Avanse and Prodigy Finance, highlighting their key differences to help you make an informed decision when seeking an education loan.

From the above table, the major takeaway that can be evaluated is that in case you have a financial co-applicant with income that meets the minimum income criteria then it is a good option to go for NBFCs like Avanse in this case. This has been suggested as the interest rate that you may get will be less than compared to Prodigy. Then again when you get disbursement the loan amount will be in INR not in USD which will make it easy for you to repay considering the INR vs USD currency difference.

Apart from it, there are several other flexibilities that you can get with Avanse but in the end, if you do not have a financial co-applicant then Prodigy is a better option to get an abroad education loan. Let’s understand all the basis of differences in depth for a better understanding.

Avanse Vs. Prodigy Finance Education Loan – Benefits

When looking at education loans from Avanse and Prodigy Finance, it's crucial to grasp their main features, advantages, and differences to determine which option suits your needs best. Below is a comparison of both based on several factors:

Why Should You Consider an Education Loan from Avanse Finance?

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  Avanse offers complete financing for your overseas education, which includes tuition fees, books, travel, living expenses, and other related costs.
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  Avanse provides both secured and unsecured loan options, with unsecured loans available for amounts up to ₹75 lakhs.
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  You can get your loan approved within 72 hours, ensuring a quick loan sanction. Avanse offers competitive interest rates and processing fees starting at just 1%.
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  Avanse offers flexible repayment plans, with loan tenures that can extend up to 15 years.

Now, let’s look at the benefits of the Prodigy Finance Education Loan. 

Why Should You Consider an Education Loan from Prodigy Finance?

Prodigy Finance provides several important advantages, such as:

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  Prodigy Finance considers your future earning potential, thus you do not require a co-signer or collateral.
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  Prodigy Finance eligibility criteria are simple and hassle-free and are designed to support students from various universities around the world.
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  Prodigy Finance provides you with a grace period following graduation before you need to actually start repaying your loan. Moreover, they do not charge any penalties for paying off early.
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  They also provide extra value-added services to improve your experience as an international student.

Type of loans by Avanse and Prodigy Finance

Understanding the type of lender is crucial when selecting an education loan for studying abroad. It helps determine the specific services and offerings that the lender provides, ensuring a better fit for your needs.

The difference between Avanse and Prodigy in this aspect is:

• Avanse is an NBFC that can provide you with a study abroad education loan but need a co-applicant. This will act as a security, but the disbursed amount will go into your account.  
• On the other hand, Prodigy is an international lender that is they can provide you with an education loan without any co-applicant and collateral. The loan sanctioned will be directly transferred to the university.

Avanse vs Prodigy: Maximum loan amount and interest rate

The maximum loan amount offered by a lender is an important consideration that can impact the decision-making process. A higher maximum loan amount increases the likelihood of covering 100% of your expenses. Additionally, the interest rate associated with the loan amount is another crucial factor to consider. Even a slight variation in the interest rate can have either positive or negative implications for the loan applicant.

The difference between Avanse and Prodigy in this aspect is: 

• Avanse offers a maximum loan amount of up to 75 Lakhs INR for STEM courses in the USA. On average, they approve loans of around 40 Lakhs INR. The interest rate for these loans typically ranges between 12% - 13.25%.
• Prodigy Finance offers a maximum loan amount of up to 100,000 USD in foreign currency. The interest rate charged by Prodigy Finance typically ranges between 11% - 14%.
• There is a clear difference that is the currency of disbursed amount. Prodigy will disburse the amount in USD while Avanse will do it in INR. It is better to take a loan in INR as with the help of it the repayment becomes easier. You can join GyanDhan’s discussion forum to take part in INR vs USD discussion thread and get to know more about it.

Did you know? Prodigy Finance's Fall 2024 Campaign, launching today, provides a "no collateral, no cosigner" solution and special rates starting at 12% IRR for selected profiles. Targeting first-year students for Fall 2024, it aims to make education accessible on merit, with eligibility and reduced rates on a first-come, first-served basis.

Read more about: How to Check Avanse Education Loan Status

Co-applicant requirement in Avanse vs Prodigy Finance

When applying for an education loan without collateral, having a co-applicant becomes important, particularly with private banks and NBFCs. The co-applicant serves as a form of security, and the co-applicant must meet the minimum salary criteria.

The difference between Avanse and Prodigy in this aspect is:

• Avanse requires a financial co-applicant to act as security for the loan. The co-applicant should meet the minimum income criteria, which typically ranges from 35,000 to 50,000 INR, without any additional financial obligations.
• On the contrary, Prodigy Finance does not require any co-applicant, and thus having a minimum income as an eligibility requirement is also irrelevant in this case.

Read more about: InCred vs. Avanse: Which is Better for Abroad Education Loans?

Processing fees for Avanse vs Prodigy Finance:

Processing fees can be a deciding factor when choosing between lenders. Higher fees increase the overall cost of the loan, while lower or zero fees can save money. Consider fees to assess affordability, utilization of loan amount, and compare loan offers.

The difference between Avanse and Prodigy in this aspect is:

• The processing fees that Avanse will charge you can range between 0.5% - 1% plus GST. This is a one-time processing fee that you have to pay upfront based on the loan amount that you have been approved for.  
• Whereas, Prodigy charges 5% of the disbursed loan amount as the processing fees which are also called administration or origination fees in the case of international lenders. Unlike Avanse, Prodigy will charge this fee on every disbursement.  
• Prodigy Finance will charge a prepaid fee of 100 USD, which was earlier 50 USD 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.

Avanse Vs. Prodigy Finance Education Loan – Documentation and Application Process

When comparing education loans from Avanse Finance and Prodigy Finance, it's essential to look at the documentation and application process for both. 

Avanse Finance Documentation and Application Process:

Students must meet the eligibility criteria set by Avanse Finance, including academic requirements, the course, and university selection.

Required Documents:

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  KYC Documents like passport, aadhar card, or voter ID.
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  Income Proof like salary slips, income tax returns, or bank statements.
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  Academic Records including mark sheets, admission letters, or offer letters from the university.
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  Course Details including fee structure and course details from the university.
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  Collateral documents for higher loan amounts.

Application Process:

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  Online Application: Students can apply through the Avanse website or via offline consultation.
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  Document Submission: Submit the required documents either online or at the nearest branch.
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  Approval: After verification, the loan amount is determined based on eligibility and loan amount.
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  Disbursement: The loan is disbursed either directly to the student or the university.

Prodigy Finance Documentation and Application Process:

Prodigy Finance does not require co-signers or collateral, instead, the eligibility is determined by future earning potential rather than financial history.

Required Documents:

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  Identity Proof: A passport or a government-issued ID.
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  Address Proof: This document must include your full name and residential address. It should correspond with the information provided in your application.
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  Admission Offer: An admission offer letter from an eligible university 
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  Financial Documents: A comprehensive breakdown of the expected costs for the course, including tuition and living expenses.
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  Your Credit Report: Furthermore, the bank needs a credit report that details your credit history from an authorized credit agency in your country. If you have never used credit before, you can provide a “No hit” or “No data” report.
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  Academic Records: Transcripts or certificates from previous education.

Application Process:

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  Online Application: Students must apply through the Prodigy Finance website by creating an account and filling out the application form.
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  Document Upload: Upload the required documents via the online portal.
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  Loan Approval: Loan approval is based on the student’s future earning potential, with no requirement for a co-signer or collateral.
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  Loan Offer: After evaluation of your loan application, Prodigy Finance presents a loan offer that includes interest rates and repayment details.
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  Disbursement: The loan amount is directly disbursed to the student or the university, generally they disburse the loan amount in installments.

Repayment and moratorium period for Avanse vs Prodigy Finance

Repayment and moratorium are vital factors when selecting a lender for an education loan. Understanding the repayment terms helps with financial planning and flexibility, while the moratorium period allows time before starting repayments. Evaluating these factors ensures a smooth transition and the ability to meet repayment obligations, impacting credit scores positively.

The difference between Avanse and Prodigy in this aspect is:

• Avanse provides education loans to study abroad that would need an applicant to either pay Partial Simple Interest (PSI) or Simple Interest (SI) during the moratorium period is a course period plus one year. 
• Conversely, Prodigy Finance does not require you to pay anything during the moratorium period (course period plus six months) in case you have a good application profile.

Avanse vs Prodigy: Programs supported:

This is one of the important factors to consider when you are choosing between Avanse and Prodigy. In case the program that you are trying to get enrolled in is not supported then it is of no use to proceed with that particular lender.

The difference between Avanse and Prodigy in this aspect is:

• Avanse offers education loans for a range of programs including masters and diplomas, to study abroad. In contrast, Prodigy Finance focuses specifically on providing education loans for master's programs abroad.

From the above differentiative analysis, it is clear that the major factor that will make you either go for Avanse or Prodigy is the availability of a financial co-applicant that meets minimum income criteria. Apart from it, you can also consider Avanse if you are planning to do a diploma course as Prodigy only supports master's programs. In the end, it all comes down to the individual requirements that can help you make the choice.

Now that you are aware of the differences, begin your study abroad journey with confidence with either Avanse or Prodigy Finance by evaluating them with respect to your individual requirements. Find the ideal financing solution for your educational aspirations and take the first step towards international education. Don't miss this opportunity - check your loan eligibility now with GyanDhan for a seamless and hassle-free process to secure your education loan for studying abroad.

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• Prodigy Finance Education Loan Disbursement Process
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• Education Loan Without Collateral
• MPOWER Financing Education Loan Disbursement Process
• MPOWER financing vs prodigy
• hdfc credila vs avanse
• Avanse vs Auxilo

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