Funding U Student Loans Review 2024: Pros & Cons
Funding U student loans can be a good choice if your credit score is too low to qualify with another lender. Funding U also takes academic factors into account.
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Funding U is a worthwhile option if your credit score is too low to qualify with another lender, because it takes academic factors into account when making loan approval decisions. But you can't apply with a co-signer and are likely to pay a higher rate than you would with a lender that offers that option.
Funding U Student Loans Overview
Funding U doesn't have the best rates on its undergraduate student loans, with higher maximum APRs than other private student loan lenders. The company also doesn't offer variable-rate loans, so you'll have to take a fixed-rate loan.
Funding U doesn't make lending decisions solely based on creditworthiness. It will also consider factors like your academic performance and future potential career success when choosing to offer you a loan.
Funding U won't charge any origination, prepayment, late, or application fees. You must take out a loan with a 10-year repayment term.
Funding U offers undergraduate student loans but no graduate loans. You can't apply with a cosigner, and your loan eligibility is based on a proprietary system developed by Funding U that takes into account your collegiate academic success, likelihood to graduate on time, and total loan debt, among other factors.
You should go after federal student loan options before considering private student loan, including one with Funding U, as you can usually get better terms and protections through the government.
Loans aren't available for residents of Alabama, Alaska, Delaware, Idaho, Kentucky, Louisiana, Maine, Minnesota, Mississippi, Montana, Nevada, New Hampshire, North Dakota, Oklahoma, Rhode Island, South Dakota, Utah, Washington, or Wyoming.
If you want to contact Funding U's customer support, you must reach out to them via email.
Funding U Student Loan Pros & Cons
Funding U Student Loan Pros
- No origination fee, prepayment penalty, or late fee
- Loans aren't based solely on creditworthiness
Funding U Student Loan Cons
- Low maximum loan amount
- Customer support only available via email
- Relatively high interest rates
- One repayment term option
- Loans aren't available for residents of 19 states
- No graduate student loans
- No variable-rate loans
Funding U Student Loan Repayment Options
You only have two options to repay your student loans with Funding U: fixed and interest-only payments. The better repayment plan depends on your situation.
Fixed payments will be more expensive than interest-only payments because interest will accrue during school and your grace period. You'll also get a rate discount with interest-only loans.
Fixed Payment Student Loan Repayment Options
- Pay $20 per month while in school and during a six-month grace period
- Unpaid interest accrues
- Interest is capitalized at the end of grace period
- Low in-school payments
Interest-Only Repayment Options
- Pay loan's interest monthly while in school and during a six-month grace period
- Higher in-school payments
- You'll get a 0.5% interest rate discount with an interest-only loan
How to Apply for a Funding U Student Loan
1. Get preapproved. Fill out the form on Funding U's website to determine if your eligible and get preapproved for a loan. This will require documents including your driver's license or other identification, school transcripts, financial aid award letter, and tuition bill.
2. Upload any additional documentation as needed. Funding U may request additional information before preapproving your loan application.
3. Talk to a Funding U loan advisor. The lender will assign a loan officer who will assist you with details like your loan offer, repayment options, interest rate and terms.
4. Review and sign your loan offer. Carefully review all the details in the final loan offer Funding U sends you. Then sign your loan offer documents. The loan details will be sent to your school for final approval.
Funding U Student Loan Alternatives
Learn more about how Funding U compares to popular student loan options.
Funding U vs. Earnest Student Loans
Funding U student loan APRs range from 7.99% - 13.99% fixed (with AutoPay), compared with a range of 5.62% - 16.85% variable and 4.29% - 16.49% fixed (with AutoPay discount) for Earnest student loans. You can only get fixed-rate loans with Funding U, while Earnest also offers loans with a variable rate.
Funding U offers student loans ranging from $3,001 — $20,000, while Earnest's loan amount range is from $1,000 to the total cost of attendance. Neither lender charges any additional fees. Earnest allows co-signers, while Funding U does not.
Funding U vs. MPower
MPower student loan APRs range from 13.74% to 14.75% fixed (with AutoPay discount), compared with 7.99% - 13.99% fixed (with AutoPay) at Funding U. Both lenders offer only fixed-rate student loans.
MPower charges a 5% origination fee and undisclosed late fee. You won't pay any additional fees with Funding U. You can borrow from $2,001 — $100,000 lifetime from MPower, compared with $3,001 — $20,000 at Funding U.
Why You Should Trust Us: How We Rated Funding U Student Loans
We rate all student loan products in our reviews and guides on a 1-5 scale. The overall rating is a weighted average that takes into account seven different categories, some of which are judged more heavily than others. They are:
- Interest rate (20% of rating)
- Fees (20% of rating)
- Term lengths (15% of rating)
- Repayment options while in school (15% of rating)
- Borrower accessibility (15% of rating)
- Customer support (7.5% of rating)
- Ethics (7.5% of rating)
Each category's weighting is determined based on its importance to your borrowing experience. Rates and fees have the most significant impact on the total cost of your loan, so we weigh those the most heavily. Customer support and ethics are still crucial parts of the borrowing experience, but they do not directly tie to a student loan's terms, so they have less of an impact on the overall rating.
Read more about how we rate student loans >>
Funding U Student Loan FAQs
Is Funding U legit?
Funding U has an A- rating from the Better Business Bureau but is not accredited by the organization. The lender doesn't have a history of scandals.
What credit score do you need for Funding U?
Funding U does not say what minimum credit score it will consider to approve a student loan. The lender also considers factors like your academic performance and future potential career success when evaluating your student loan application.
What is the minimum GPA for FundingU?
Funding U says it has minimum GPA and graduation rate thresholds for all borrowers that vary depending on your college and class year. The lowest is 2.5.
What is the maximum loan amount for FundingU?
Funding U offers student loans of as much as $20,000.