In years past, college students were hard-pressed to find a lender who would provide a private student loan without a cosigner. The latest MeasureOne Private Student Loan report shows almost 92% of all undergrad private student loans had a cosigner in the 2017-2018 academic year. But as you’ll see in this Funding University loan review, the situation may be changing.
Funding University — or “Funding U” for short — knows not everyone has a parent or friend able or willing to share debt with them. That’s why this student loan company is willing to lend to undergraduates without a cosigner.
If you’re looking for funds to pay for college, read on to learn how Funding University could grant you a loan all on your own.
Funding University loan review: The basics
Funding University — also known as Funding U for short — is one of the only private student loan companies that offers loans to college students with no cosigner. Instead of relying on typical underwriting criteria, such as your income and credit score, Funding U reviews your academic record, employment experience and other academic and nonacademic activities.
If you qualify, you could borrow between $3,001 and $10,000 per school year. Your fixed-rate loan currently comes with an annual percentage rate (APR) of 11.49% if you also sign up for autopay (or 11.99% APR without autopay) as of March 22, 2019.
You’ll need to make interest-only payments while in school. Full repayment starts six months after graduation and spans 10 years. That said, you can prepay your loan ahead of this deadline without penalty.
Funding University doesn’t charge any origination fees for its loans. And if you run into financial trouble, Funding University offers forbearance for up to 24 months, during which time you’ll only have to pay $30 each month.
What we like about Funding University
While there are lots of private student loan companies out there, Funding University is one of the only ones offering loans without a cosigner. Here’s a look at the details, as well as some of the other benefits we also liked.
You don’t need a cosigner to qualify
Most private lenders use similar underwriting criteria to qualify a candidate for a loan: They typically look at your credit and income as indicators of whether you can pay back the debt on time and in full.
Since most undergraduates don’t have significant income or a strong credit history, they must apply with a cosigner who does. This cosigner, often a parent, agrees to share debt with the student.
But sharing debt is a big deal, as your cosigner’s credit could be impacted if you make late payments. Plus, you might not know anyone with strong enough credit to help you qualify.
With Funding University, you don’t need to worry about finding a cosigner who’s willing or able to take out a loan with you. You can get the funds you need for school without having to worry about tracking down a creditworthy friend or family member and putting their credit on the line.
Your academic record and work experience play a role
So if Funding University doesn’t require a cosigner, what information do they collect? Well, this loan company lends to students who are “serious about their academic success and post-grad career.”
To determine this seriousness, Funding University looks at your academic and work history. When you apply, Funding University will review criteria such as:
- Class hours completed
- Academic record
- College and major
- Employment or internship experience
- Other academic and nonacademic activities
By focusing on your academic and work history, Funding University encourages borrowers to think long term. In turn, working toward a professional goal might make you feel more connected to the purpose of your loan and have a clearer plan of how you’ll pay it back.
You can get instant prequalification and fast funding
As a relatively new online student loan company, Funding University offers a tech-forward lending process. You can prequalify in two minutes with no obligation and no impact on your credit score.
If you find an offer you like, you can apply online by uploading your transcript and resume. A Funding University loan advisor will also call you to talk you through the process and ensure you understand what borrowing and repayment entail.
After certifying your school’s cost of attendance and verifying your enrollment, Funding University will send the money directly to you (half in the fall and the other half in the spring). All in all, the process takes just six to eight business days.
What to keep in mind about Funding University
Now that you have a sense of the perks of borrowing from Funding University, let’s take a closer look at potential downsides.
You might find lower interest rates elsewhere
Every loan from Funding University comes with a fixed rate of 11.49% (with autopay). Since interest charges add up, you should probably still shop around to see if you can get an even lower rate.
Other private lenders might offer a lower rate if you or your cosigner have strong credit and income. College Ave, for instance, offers variable rates starting at 4.07% and fixed rates from 5.29%.
If you do have a creditworthy cosigner willing to take out a private student loan with you, you might be better off going with a different lender that can offer you a lower rate.
New students might have a tougher time qualifying
Since Funding University looks at your college transcript when considering you for a loan, new students might have a tougher time qualifying than juniors or seniors. When the company first started, for instance, the majority of their portfolio were upperclassmen.
If you’re a freshman or sophomore, Funding University will look at data about your school and its alumni, including how many students proceed each year and how many graduate on time and get jobs.
So if your school’s retention, graduation or employment rates are weak, you could have trouble qualifying for a loan. Once you’ve built up more class hours, however, Funding University will take your individual track record into account, instead of relying more heavily on data from your school as a whole.
Loans are only available in certain states
While this company is growing fast, it’s not yet lending across the entire U.S. As of March 2019, Funding U loans were offered only in the following states:
- New Jersey
- New Mexico
- New York
- North Carolina
- South Carolina
- West Virginia
So if you live at a state not listed, you’ll need to look elsewhere for a private student loan.
Funding U student loans review: Final thoughts
While Funding University has some great features, don’t forget some of the issues related to private student loans in general. Specifically, remember that it’s almost always a good idea to max out your eligibility for federal student loans before turning to a private lender. Federal student loans don’t require a cosigner, and they come with relatively low fixed-interest rates and a variety of flexible repayment plans.
But since federal student loans also have borrowing limits, you might need additional funds for school. That’s where a private student loan can really come in handy, as long as you find one with decent rates and avoid borrowing too much.
Funding University is likely the best option out there for students who can’t get (or don’t want) a cosigner on their loan. But it only offers up to $10,000 per year, so you might need to hunt around if you need additional funding beyond that amount.
What’s more, you should try to compare multiple loan offers to ensure you’re finding the best rates. That way, you can pay the least amount in interest while you slowly but surely knock off your student loans.
Student Loan Hero has independently collected the above information related to Funding University and other financial institutions, which is current as of March 19, 2019, unless otherwise noted. Funding University and any other lenders mentioned neither provided nor reviewed the information shared in this article.
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|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 4/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.24% – 13.24%1||Undergraduate and Graduate|
|4.07% – 11.32%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.50% – 11.35%*,4||Undergraduate and Graduate|
|4.25% – 13.25%5||Undergraduate and Graduate|
|6.08% – 7.22%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.42%8||Undergraduate, Graduate, and Parents|