Avenify charges an initial 2% servicing fee on all investments, and a 1.5% fee on each student payment. Our return model targets a 7-9% IRR for our investors, net of these fees.
If you invest $10,000, we will collect $200 up-front, and $9,800 will be disbursed to students. Once the student starts making payments, Avenify will collect 1.5% of each payment, and 98.5% of each payment will be returned to investors.
For a student who borrows $9,800 and is expected to earn $60,000 per year initially, with 3.5% salary growth afterwards, their income share would be set at 3.47%. At these terms (and factoring in unemployment and default risk), they would pay back around $22,000 over the course of their 120-month ISA. One-and-a-half percent of those payments, or about $330, would go to Avenify; the remaining $21,670 would be returned to investors.
In this example, with an initial investment of $10,000, a period of 135 months (120-month ISA plus 15-month deferment for studies), and a return to investors of $21,670 (after fees), the IRR for investors would be 7.12%.