Sep 13, 2021 Minnesota News — Staff Reporter

Funding U student loans review: Lender doesn't allow cosigners and bases decisions on academic success

Pros and cons

Funding U undergraduate student loans

Regular APR

Fixed: 7.49% to 12.99%

  • Pros Cons
  • Details
  • Pros
    • No prepayment, origination, or late fees
    • No cosigner needed
    Cons
    • Low maximum loan amount
    • Relatively high APRs
    • One repayment term option
    • Loans unavailable for residents of 19 states
    • Only fixed-rate loans
    • Limited customer support options
    • Apply through your computer or mobile device
    • Customer service available via email
    • 10-year repayment term
    • Loan minimum of $3,001, maximum up to $15,000
    • Residents of AL, AK, DE, ID, KY, LA, MA, MN, MS, MO, NV, NH, ND, OK, RI, SD, UT, WA, and WY ineligible for loans
    • No cosigner allowed  
    • Loans made through Funding University

    Funding U doesn't have the best rates on its undergraduate student loans, with a much higher minimum APR 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 with the business. 

    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.

    How Funding U compares 

    Funding U has high minimum rates compared to its competitors. Here's how Funding U compares:

    Funding U has a higher APR range than both Earnest and Discover. You can also only get fixed-rate loans with Funding U, while the other two lenders offer a variable-rate option. You won't pay fees with any of the lenders.

    Earnest and Discover both allow cosigners, while Funding U doesn't. At the same time, Funding U's unique lending process may make it easier for you to get a loan with the company than with another one.

    How Funding U student loans work

    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. 

    What options do I have to repay my loans?

    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. 

    Is Funding U trustworthy?

    Funding U has received an A+ in trustworthiness from the Better Business Bureau. The BBB measures trustworthiness by evaluating business' replies to consumer complaints, truthfulness in advertising, and clarity about business practices. 

    You aren't guaranteed to have a good relationship with Funding U simply because the business has a high BBB rating. Ask with your friends and family about their experiences with the lender and read what other customers are saying about the company. 

    Funding U doesn't have a history of any scandals, so you may decide you're comfortable borrowing from the lender. 

    Ryan Wangman

    Junior Loans Reporter

    Ryan Wangman is a junior reporter at Personal Finance Insider reporting on personal loans, student loans, student loan refinancing, debt consolidation, auto loans, RV loans, and boat loans. In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership. He graduated from Northwestern University and has previously written for The Boston Globe.  Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services here

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