How do provident loans work

Parent Loan: This information is for borrowers with students attending degree-granting institutions only. The student is not eligible to be a borrower or cosigner and must be attending or have attended a participating school during an eligible prior enrollment period, or be enrolled in an eligible study abroad program. The borrower, cosigner and student must be U. The school may refund loan funds directly to the student, and if that occurs, borrower and cosigner if applicable would still be responsible for repaying that amount to Sallie Mae.

Although we do not charge you a penalty or fee if you prepay your loan, any prepayment will be applied as provided in your promissory note: First to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal. All rights reserved.

All other names and logos used are the trademarks or service marks of their respective owners. Fixed Rate Personal Loan This fixed rate personal loan is a great way to pay for home improvements or unexpected expenses. Features Low fixed rate of 9. Solar Advantage Loan This fixed loan rate is for financing the purchase and installation of solar power for your home. Features Fixed rates as low as 5. Product Details Apply. New Teacher Loan This fixed rate loan is available to new teachers and school personnel that have recently transferred to a new school system.

Smart Option Student Loan Get the money you need to help make higher education happen. Features Competitive variable and fixed interest rates No origination fee or prepayment penalty Multiple repayment options. Certificate Secured Loan This loan is fully secured by funds from your Term Share Certificate account and can be used to establish or re-establish credit.

Provident plan to cap compensation for mis-selling. Image source, Getty Images. Customers will still not get all their money back.

What went wrong? Who can claim? What's an unaffordable loan? How can borrowers claim? Related Topics. Money Provident Financial Personal finance Personal debt. There is no way to restructure doorstep lending to be profitable without a significant amount of relending. Provident has been lending money on the doorstep for about years. Money-lending is a trade with many centuries more of history. But this is a modern story of how professional claims companies have been blitzing firms with complaints about unaffordable lending, many of which have been justified.

Critics of Provident will say society is better off without a lender pushing doorstep loans to people who were unable to ever repay them. Supporters say this now leaves a vacuum that illegal loan sharks will exploit. The reality is that some people may now turn to family and friends for advances - creating a dynamic which will be more than just financial.

As with many businesses operating in non-mainstream lending, there have been a flood of complaints that the appropriate affordability checks were not carried out when doorstep loans and payday loans were granted. Many of these complaints have been made through claims management companies. The City regulator, the Financial Conduct Authority, is investigating Provident for the way it handled complaints in the year to February.

In March, the company outlined a plan, called a scheme of arrangement, to limit compensation paid to customers who were mis-sold loans.