Funding U Student Loan Review: Comprehensive Analysis

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Business Insider’s personal finance team compared Funding U student loans to the best private student loans and found it to have some significant drawbacks when it comes to loan types, repayment terms, and availability throughout the U.S. However, it could be a good option if your credit score is too lower to qualify with other lenders.

Funding U Student Loans Overview

Funding U is a worthwhile option if your credit score is too low to qualify with another student loan 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.

Key Features and Benefits

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 potential career success when deciding whether 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.

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.

If you want to contact Funding U’s customer support, you must reach out to them via email. 

Funding U Interest Rates and Fees

As of August 2024, Funding U’s interest rates for undergraduate student loans in the 2024–2025 school year range from 7.99%–13.99% fixed with AutoPay, and 8.99%–13.99% fixed without AutoPay.

Fee Structure and Loan Terms

Borrowers won’t need to worry about prepayment fees, origination fees, disbursement fees, or late payment fees. However, Funding U does require monthly payments from borrowers while still in school 

Types of Funding U Student Loans

Undergraduate Student Loans

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.

Repayment Options and Flexibility

Available Repayment Plans

Funding U offers repayment options including standard, interest-only, and deferred repayment options. Traditional repayment begins six months after graduation, but borrowers can start earlier if they leave school or drop to part-time status. Extra payments are encouraged and can lower your balance without prepayment penalties.

Deferment and Forbearance Options

Funding U offers various forbearance options for students facing financial hardship, and for those hoping to continue their education post-graduation. It offers forbearance options for students both in-school and graduates who are in repayment.

Borrowers still in school will have the opportunity to apply for a forbearance applied in 90-day increments, based on the following reasons:

• Medical residency
• Economic hardship
• Military deployment
• Total permanent disability
• Temporary hardship
• National Disaster

Borrowers in repayment will have the opportunity to apply for a forbearance applied in 90-day increments based on the following reasons:

• Unemployment
• Pursuing further studies for a graduate degree at an eligible school
• Any medical residency
• Economic hardship
• Military deployment
• Total permanent disability
• Late School Notification
• Temporary hardship
• National Disaster

Funding U Student Loans Pros and Cons 

Advantages

• No origination fee, prepayment penalty, or late fee
• Loans aren’t based solely on creditworthiness

Disadvantages

• 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
• 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.

Funding U Student Loan Application Process

Eligibility Requirements

To be eligible for a Funding U student loan, you must meet the following requirements:

• You’re a U.S. citizen, permanent resident, or DACA recipient
• You’re at least 18 years old at time of application
• You’re a full-time undergraduate student at a participating partner schools

How to Apply for Funding U Student Loans

1. Get preapproved. Fill out the form on Funding U’s website to determine if your eligible and get preapproved for a loan.

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.

Required Documentation

To apply for a student loan with Funding U, you must have specific documents including your driver’s license or other identification, school transcripts, financial aid award letter, and tuition bill.

Funding U Student Loan Alternatives

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.

Earnest Student Loans Review

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.

MPower Student Loans Review

Funding U Student Loan FAQs

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. As you can see, Funding U fell short in certain categories, such as term lengths and interest rate, while it scored higher when it came to fees and and borrower accessibility, since it’s an option for those whose credit scores may be too low for other lenders.

Read more about how we rate student loans >>