What we like:
Personal customer service
|Fixed APR||7.99% – 14.49% APR|
|Loan Terms||10 years|
|Loan Amounts||Loans up to $10k per school year|
Funding University is a private student loan company focused on offering student loans without a cosigner to career driven undergrads.
Unlike most private student loan lenders, Funding U doesn’t allow for cosigners, and because of that, has unique eligibility criteria. Funding U is a good option for students without cosigners who wouldn’t qualify for a traditional private student loan on their own.
Funding U covers 30 states accounting for 90% of the U.S. population. Students who aren’t eligible will be added to Funding U’s waitlist and will be notified as soon as loans become available in their state.
In this review:
- Funding U Overview
- Interest Rates & Loan Amounts
- Eligibility Requirements
- Application Process
- Financial Hardship Options
Funding U Student Loans Overview
What does Funding U offer to students? The biggest selling point of Funding University’s student loans is that they don’t require a cosigner like most others.
Since most undergraduate students do not have a credit history or the income required to qualify for traditional private student loans on their own, this is a very unique and attractive benefit.
Not only does this help students but it also could benefit parents too. By cosigning on their children’s student loans, parents will also be responsible for repayment if their children can’t repay them. If both the student and the parent don’t make payments on the loans, both of their credit will be negatively affected.
Finally, since student loans are included in the cosigner’s debt-to-income ratio, it could also impact parents’ ability to borrow money for other things like for a mortgage or an auto loan.
What are the Interest Rates, Loan Amounts, & Repayment Terms?
Funding U offers loans from $3,000 to $10,000 per academic year and all loans come with a repayment term of 10 years.
Fixed APRs range from 7.99% to 13.49% including a 0.50% discount for signing up for autopay. All loans come with fixed interest rates.
What are the Eligibility Requirements?
Rather than looking at your credit score or income, Funding University determines your eligibility and how much you can borrow by looking at things that show whether you are on track towards your professional and academic goals or not.
Some of these may include class hours completed, graduation date, academic record, major, employment or internship experience, and any other academic or extracurricular activities that show that you are on track towards your professional and academic goals.
You will also have to be a U.S. citizen or permanent resident that is at least 18 years old attending a Title IV-eligible four year college. For-profit schools are not eligible.
If you prequalify for a loan with Funding U, they will do a credit check just to make sure that you don’t have any delinquencies on other loans.
How Does the Application Process Work?
To apply for a loan from Funding University, you will have to fill out some preliminary information online such as your GPA, SAT/ACT score, monthly income, and major in order to see if you prequalify.
This is different from most student loan applications which often require you to submit a significant amount of financial information, including your credit score.
You can see if you may be eligible for a Funding U student loan with our free application here.
Prequalified students move on next to the loan application which takes 5-10 minutes. You need three items to complete your loan application:
- Academic Transcript
- Financial Aid Award Letter
Most students who are pre-approved for a loan will have a 10-minute phone consultation with one of Funding University’s loan advisers prior to loan closing. Because they’re focused on making sure that their terms are transparent and that their borrowers understand their loans, they talk borrowers through the prospected loan terms and interest rate and explain next steps.
Funding U requires $20 payments to be made each month while students are in school. The lender wants students to establish good monthly payment habits, keep their loan balance down, and build up their credit history.
Full repayment starts six months after graduation (November for most students). Funding U works directly with students after graduation to help them transition into repayment on both their Funding U and other federal and private student loans.
One difference with Funding University loans is that they require borrowers to provide an update each semester on their academic, employment, and career prospects.
Does Funding U Have Financial Hardship Options?
If you are having trouble making payments on your loans, whether you are in school or have already graduated, there are forbearance options that may help.
If you are in school, you can make no payments at all for up to 51 months. If you have already graduated, you can make just $30 payments for up to 24 months.
Note that interest will still accumulate in these situations and will increase the total cost of your loan.
Is Funding U Your Best Option?
While there are a lot of benefits to getting a student loan without a cosigner, if you get it a traditional private student loan that is cosigned by your parents, you’ll likely qualify for a lower interest rate. This will make repayment more manageable and will save you money longterm.
Ultimately, whether Funding University is the right option for you depends on your financial situation, your career prospects, your parents’ financial situation, and their willingness to cosign student loans for you.
Because many parents can’t or won’t cosign student loans for their kids, Funding University provides an opportunity for students to access funds that they wouldn’t otherwise have at reasonable interest rates.4.28 Funding University
Author: Jeff Gitlen
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