Best for No Cosigners

4.7 _/5

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Private Student Loans

Specializes in no-cosigner student loans for undergraduates
Eligibility is based on academic performance and projected future earnings
Assigned a dedicated loan officer for support
0.50% rate discount for choosing the interest-only repayment option

You must begin making payments while enrolled in school

Rates (APR)	7.49% – 12.99%
Loan amounts	$3,001 – $20,000 per year
Repayment terms	10 years

We chose Funding U as the best for no-cosigner undergraduate student loans because of its unique approach to eligibility. Unlike most private lenders, Funding U does not consider your credit score. Instead, it considers your grades, course load, and likelihood of graduating on time.

This can appeal to students with little or no credit history who plan to attend an accredited four-year not-for-profit college in the U.S.

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Our take on Funding U’s private student loans
More about Funding U

How does Funding U work?

Funding U launched in 2015 to provide undergraduate student loans to those unable to secure a cosigner. Its mission is to make college affordable and accessible for students focused on their studies, not their credit scores.

All of its student loans come with fixed interest rates and are available for undergraduate students enrolled full-time at accredited four-year colleges in the U.S. Eligible borrowers must be:

U.S. citizens, permanent residents, or DACA recipients
At least 18 years old
Live in an approved state (39 states are eligible as of April 2024; listed below)

Funding U does not require (or even allow) cosigners and considers academic achievement over credit alone when making lending decisions. One of its primary goals is to reward responsible borrowing.

Borrowers can prequalify for a loan with a soft credit check before submitting a full application. Funding U will determine the appropriate loan amount if approved based on the cost of attendance and other financial aid. Funds are disbursed directly to your school.

Our take on Funding U’s private student loans

Rates, borrowing limits, and fees

Due to its commitment to simplicity, Funding U’s no-cosigner undergraduate loans come with less flexibility than other lenders in terms of loan amounts and repayment options.

Feature	Details
Fixed rates (APR)	6.99% – 12.99%
Rate discounts	0.50% for making interest-only payments
Loan amounts	$3,001 – $20,000 per academic year
Fees	Late payment

What are the eligibility requirements?

Funding U’s mission is to provide students with the means to finance their education based on their merits and future potential. This makes it more accessible to borrowers without a cosigner despite its limited geographical availability.

Eligibility requirements	Details
Citizenship	U.S. citizens, permanent residents, or DACA recipients
State of residence	Available in 38 states (listed below)
Minimum age	18 years
School	Four-year accredited not-for-profit colleges in the U.S.
Enrollment status	At least half-time
Credit score	Not applicable
Income	Not applicable

Available in Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin

How does repayment work?

While Funding U’s repayment terms are less customizable than other lenders, this might be a fair trade-off for borrowers who aren’t able to add a cosigner to their loan.

All of its loans are repaid over a 10-year term following the six-month graced period, which begins after you graduate or drop below half-time enrollment. There are no prepayment penalties for paying off the loan before the end of the 10 years.

All borrowers must make payments while enrolled in school. This includes either flat $20 payments or interest-only payments each month. There is no option to defer payments until after you leave school.

Here’s what interest-only payments might look like for two loans:

Loan amount	APR	Monthly interest-only payment
$10,000	9.99%	$83.25
$20,000	12.99%	$216.5

Note: These calculations assume the interest is calculated and paid monthly and do not consider any capitalization of unpaid interest. In practice, unpaid interest may capitalize, meaning it is added to the loan’s principal balance and would result in higher future payments.

Here’s an example of a Funding U loan compared with a loan from a different student loan company that allows a 15-year term and allows the borrower to defer payments while in school:

	Funding U	Lender 2
Loan amount	$20,000	$20,000
Term	10 years	15 years
APR	9.99%	9.99%
In-school repayment	24 months at $20 per month	None
Balance at start of repayment	$19,520	$20,000
Monthly payment	$252.90	$209.12
Total repayment	$30,348	$37,641.60

Note that these calculations are just examples. Actual payment amounts might differ based on the specific terms of your loan.

How can Funding U improve its private student loans?

While Funding U’s approach to student loans is unique and an excellent option for borrowers without a cosigner, there are some areas in which it could improve:

Its maximum loan amount of $20,000 per year may be inadequate for students who need more financial assistance to cover their educational expenses. Ascent offers no-cosigner student loans; its maximum aggregate is $200,000 for its non-cosigned credit-based loan.
Funding U’s service availability is another area for growth. As of April 2024, the lender doesn’t operate in all 50 states, leaving numerous students unable to access its services. Ascent is available nationwide and offers two no-cosigner student loans.
Funding U’s one repayment term of 10 years could be limiting or inconvenient for borrowers who prefer several options based on their financial situation. Ascent’s non-cosigned credit-based loan offers more flexibility with multiple repayment terms catering to borrowers’ varying requirements.
Unlike Funding U’s required in-school monthly payments, Ascent allows borrowers to defer repayment (meaning they make no monthly payments) while in school.
Funding U doesn’t offer loans for summer school classes, graduate programs, or less than full-time enrollment. Edly offers income-based student loans that can be used for summer classes.

How do Funding U private student loans compare to other lenders?

To better understand Funding U’s position in the no-cosigner student loan market, we’ve compared it to competitors Ascent and Edly.

	Funding U	Ascent	Edly
Our rating	4.7 stars	4.4 stars	3.9 stars
Rates (APR)	6.99% – 12.99%	9.46% – 15.88%	% of income
Min. funding	$3,001	$2,001	$5,000
Max. funding	$20,000	$200,000	$15,000
Repayment terms	10 years	5 – 15 years	Not disclosed
Grace period	6 months	9 months	4 months
	View rates	View rates	View rates

Is Funding U a reputable lender?

Funding U isn’t accredited by the Better Business Bureau (BBB), meaning it hasn’t sought or secured this organization’s endorsement. The BBB rates businesses based on several factors, including customer complaint history and transparent business practices.

Despite not being BBB accredited, Funding U boasts an A rating as of April 2024. It doesn’t have many filed complaints but did take responsibility for three errors while clarifying how it would prevent future complications.

As a relatively new lender, Funding U is working to build its reputation and collect online reviews. We consider it a reputable lender based on our conversations with its team and the reviews of its borrowers.

Does Funding U have a customer service team?

Funding U doesn’t list a phone number or online chat that can be used to contact its team. You can reach out via email at [email protected].

All loans are serviced by Scratch Services for management and communication related to repayment.

How to apply for a Funding U student loan

Compared to other lenders, the application process with Funding U is streamlined. Since Funding U focuses on no-cosigner loans, you only need to provide your information.

Here’s a step-by-step guide to apply for a student loan from Funding U:

Step 1: Check your eligibility

Start by clicking “Apply Now” on the website to determine your eligibility.

You’ll enter essential information about your school, grades, major, state of residence, and how you plan to make the minimum required in-school payments. This only takes a few minutes.

Once Funding U determines you’re eligible for a loan, it will prompt you to advise how much you want to borrow and agree to a credit check as part of the preapproval process,

Step 2: Get preapproved

After submitting your application, you should hear back within a few days. You’ll now provide your verification documents, including:

A state-issued ID
Your most recent full transcript
Your financial aid award letter
Your tuition bill

You’ll also get in touch with your dedicated loan officer.

Step 3: Sign the final documents

You’ll receive and sign your final loan documents to complete the process. Following final approval, Funding U disburses the funds to your school and applies them evenly across that year’s remaining terms. For instance, if you apply in the fall, it will disburse half the funds for the fall and half for the spring term.

What if I’m denied a student loan from Funding U?

If you’re denied a student loan from Funding U, you’ll receive a notice that explains why you were rejected or instructions on how to receive that information.

You can reapply for a loan if your information has changed or you think there was an error in your application.

If there were no errors and you need an alternative lender, you can check out our top picks for student loans without a cosigner.

How we rated Funding U student loans

We compared Funding U to six student loan lenders specializing in no-cosigner student loans. Its editorial rating reflects how it compares to those six lenders.

We considered 26 factors, including rates, repayment terms, fees, unique benefits, and more. Ultimately, we picked Funding U as the best no-cosigner student loan for undergraduates.

Funding U FAQ

Does Funding U offer private or federal student loans?

Funding U offers private student loans. Unlike federal student loans, these loans aren’t provided by the government. Instead, they come from Funding U as a private financial institution.

Find out more about the differences between federal and private student loans and why we recommend maxing out available federal loans before using private student loans.

Does applying with Funding U hurt my credit?

We could not confirm whether Funding U does a hard credit inquiry, which can cause your credit score to drop by a few points. We confirmed it considers your credit history but not your FICO score to determine eligibility.

Does Funding U require a cosigner?

No, Funding U doesn’t require a cosigner for its student loans. It focuses on the student’s academic progress and future earnings potential rather than relying only on credit history or a cosigner.

Students with a solid credit history or a cosigner might find better rates elsewhere.

What can Funding U student loans be used for?

Funding U student loans are intended to cover educational expenses. These include tuition, fees, room and board, and other school-related costs. However, remember that the lender will disburse funds to the school, not you.

How long does it take to receive funds from Funding U?

After you apply and get final approval, Funding U sends the money to your school. The exact time frame depends on your school’s disbursement schedule.

Can Funding U student loans be forgiven?

Funding U doesn’t offer loan forgiveness programs for its private student loans. Private student loans aren’t eligible for federal forgiveness programs.

Recap of our Funding U student loans review

Student loan	Best for	Our rating
Undergraduate	No cosigner	4.7 out of 5