An independent breakdown of how Prodigy Finance variable APR is calculated, what the ~4% administration fee means in real numbers, and the true total cost of borrowing.
Prodigy Finance charges a variable APR — an interest rate that changes over the life of your loan based on movements in a benchmark market rate. As of 2026, the relevant benchmark is typically the 3-month Secured Overnight Financing Rate (SOFR), or an equivalent rate applicable to your loan jurisdiction.
Your total APR = benchmark rate + Prodigy Finance's fixed spread. The spread is determined at the time of your loan offer and is fixed for the life of the loan. What moves is the benchmark. In 2021, when 3-month SOFR was near 0.25%, total variable APRs were in the 5–7% range. By 2023, when SOFR reached 5.3%, the same loans saw APRs in the 11–15% range.
In June 2026, with benchmark rates having declined from their 2023–2024 peak, total variable APRs for new originations are estimated to start from approximately 8.41% for the most eligible profiles at top-ranked schools.
* Tier groupings and APR ranges are estimated and illustrative. Actual rates are determined by Prodigy Finance based on your specific profile and loan application.
The ~4% administration fee is added to your loan balance at disbursement. It is not charged upfront separately — it is financed as part of your loan. This means you borrow the fee amount and pay interest on it for the entire repayment period.
| Loan Amount | Admin Fee (~4%) | Starting Balance After Fee |
|---|---|---|
| $20,000 | $800 | $20,800 |
| $40,000 | $1,600 | $41,600 |
| $60,000 | $2,400 | $62,400 |
| $80,000 | $3,200 | $83,200 |
| $100,000 | $4,000 | $104,000 |
| $60,000 loan · 9.5% variable APR · 2-year MBA · 10-year repayment | |
|---|---|
| Loan disbursed to university | $60,000 |
| Administration fee (~4%) added at disbursement | + $2,400 |
| Starting balance | $62,400 |
| Interest capitalized over 2-year study period (est.) | + $13,020 |
| Balance at graduation | $75,420 |
| Interest capitalized during 6-month grace period (est.) | + $3,550 |
| Balance at repayment start | $78,970 |
| Estimated monthly payment (10-year term) | ~$822/month |
| Total repayment over 10 years | ~$98,640 |
| Total interest paid over loan lifetime | ~$38,640 |
Estimates at fixed 9.5% illustrative APR. Use the full calculator for your own figures.
MPOWER Financing charges an origination fee of approximately 5% (vs Prodigy's ~4%), which is added in a similar way at disbursement. On a $60,000 loan, MPOWER's fee ($3,000) is $600 more than Prodigy's ($2,400). However, MPOWER's fixed-rate products eliminate the variable rate risk. See the full comparison →