Funding U Student Loans 2025 Review: Pros, Cons, and Alternatives

Business Insider’s personal finance team compared Funding U Undergraduate Student Loans to the best private student loans and found them 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 low to qualify with other lenders.

Funding U only offers undergraduate student loans for amounts of $3,001 to $20,000 per school year without a cosigner — a lower maximum than some other lenders.

Before taking out private student loans, be sure to explore your federal student loan, scholarship, and grant options first. Federal student loans come with protections that private student loans don’t offer, such as lower fixed interest rates and student loan forgiveness.

Funding U Student Loans Pros & Cons

Funding U Student Loan Pros

• No fees. Funding U doesn’t charge application fees, origination fees, prepayment penalties, or late fees.
• Merit-based student loans. Loans aren’t based solely on creditworthiness and don’t require you to find a cosigner.
• Generous referral program. Existing Funding U borrowers can earn a $200 Amazon gift card when a new student successfully receives a Funding U loan using the existing borrower’s referral link.
• Graduation Reward Program. Funding U will send you a $100 Amazon gift card if you previously received a Funding U and have since graduated with your Bachelor’s degree.

Funding U Student Loan Cons

• Low maximum loan amount. You can only borrow up to $20,000 per academic year.
• Relatively high interest rates. Fixed interest rates for Funding U student loans are slightly higher than average.
• Limited repayment terms. Funding U only has five or 10-year repayment terms available.
• Not available in every state. Loans aren’t available for residents of Alaska, Idaho, Kentucky, Maine, Mississippi, Montana, New Hampshire, Nevada, New York, or Wyoming.
• Only available to undergraduates. Funding U does not currently offer graduate student loans or student loan refinancing.
• No variable-rate loans. This lender only offers fixed interest rates.

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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 the time of application
• You’re a full-time undergraduate student at a participating partner schools
• You are a resident of an eligible state (not a resident of Alaska, Idaho, Kentucky, Maine, Mississippi, Montana, New Hampshire, Nevada, New York, or Wyoming)

Step-by-Step Application Process for Funding U Student Loans

1. Get preapproved. Fill out the form on Funding U’s website to determine if you are 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 Interest Rates and Fees

Current Interest Rates

Funding U’s interest rates for undergraduate student loans in the 2024 to 2025 school year range from 7.99% – 13.99% fixed (with AutoPay). Rates are slightly higher without Autopay.

Currently, the average private student loan interest rates range are around 10%, so Funding U’s rates are in line with or slightly higher than average, depending on where your exact rate falls within the range.

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 requires monthly payments from borrowers while they are still in school. Repayment terms range from five to 10 years. 

Available Repayment Plans

Funding U offers fixed and interest-only 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 both students 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 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 Overview

Funding U Undergraduate Student Loans are 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 cosigner and are likely to pay a higher rate than you would with a lender that offers that option.

This lender may be helpful if you’re trying to build your credit because Funding U will report your in-school payments to credit bureaus, which could help increase your credit score over time.

Funding U Student Loan Key Features and Benefits

Funding U don’t have the best rates, with higher minimum 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 five or 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 during business hours, which are Monday through Friday, 8:30 a.m. to 8:30 p.m. ET. You can schedule a phone call with a loan advisor or use the chatbot on the Funding U website. Another option is to email Funding U at info@funding-university.com. The lender claims to respond to emails within two business days.

Types of Funding U Student Loans

Funding U 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 credit history, among other factors.

Funding U Student Loan Refinancing

Funding U doesn’t currently offer student loan refinancing. However, you can join the waitlist on the Funding U website to be notified of when Funding U Refinance becomes available.

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 4.99% – 16.85% variable and 3.47% – 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 cosigners while Funding U does not.

Earnest Student Loans Review

Funding U vs. MPower Student Loans

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 Customer Experience

While there aren’t many online reviews of Funding U, the customer reviews we did find generally have negative things to say about the lender. A few customers on Reddit claim it took several weeks for their loans to be disbursed to their school, and they often struggle to get in touch with Funding U.

However, this does not mean that you will also have a bad experience with this lender. It’s important to do your own research and get firsthand reviews from family and friends when possible.

Is Funding U Trustworthy?

Funding U received an A+ from the Better Business Bureau, which suggests it is a trustworthy company. This means the company frequently responds to customer complaints and concerns. There are no notable lawsuits pending against Funding U at this time.

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 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 »

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