Funding University Student Loan Review

 March 28, 2019
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Private Student Loan rates starting at 0.99% APR

0.99% to 11.98% 1
VARIABLE APR

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1.13% to 11.23% 2
VARIABLE APR

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0.99% to 11.44% 3
VARIABLE APR

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  • Variable APR

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 0.99% and fixed rates from 2.99%.

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:

  • Alaska
  • Colorado
  • Connecticut
  • Florida
  • Georgia
  • Hawaii
  • Kansas
  • Massachusetts
  • Nebraska
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • Oregon
  • South Carolina
  • Vermont
  • Virginia
  • West Virginia
  • Wisconsin

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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