Do Zomia loans incur interest?

Yes. Although Zomia does not charge traditional interest on its loans, the “maximum amount paid” increases by 5% of principal during each year of repayment for up to 12 years. Repayments are made as a percentage of a graduate’s income until a repayment “cap” is reached or the contract term ends. Repayments are capped to ensure that no student is unfairly gouged; excess payments never exceed the equivalent of 5% flat annual interest. If a contract lasts more than 12 years, this equivalent flat interest rate falls below 5%.

Note: Zomia’s original loan model, in effect for our first 77 students, included a shorter overpayment period with a maximum equivalent flat interest rate of 3.5%. Our model was changed in 2018 to support improved sustainability.