Funding U Review

Tuesday, October 15th

2024 Student Loan Provider Reviews

Funding U

• $200 gift card for referrals
• Loans for undergraduate programs
• Options for loans with or without a cosigner
• No application fees or origination fees
• Loan repayment term of 10 years
• Interest rate discounts with automatic payments
• Forbearance options available
• "A” rated by the BBB

Funding University, also known as Funding U, specializes in providing student loans to high-achieving college students, particularly those who lack the typical cosigners or income required by most lenders. While their mission is commendable, Funding U has a number of restrictions that make them less attractive as a student loan lender.

Restrictions abound

Firstly, they do not operate in all states; only 39 out of 50 states are eligible. If you're in Alaska, Idaho, Kentucky, Maine, Mississippi, Montana, Nevada, New Hampshire, North Dakota, Rhode Island, South Dakota, or Wyoming, you won't be eligible for a loan here. Because of the restrictive nature of the school year lending window, it may be hard to find concrete information at Funding U. Unlike many of its competitors who offer loans year-round (or at least allow you to apply any time), Funding U only allows applications or even prequalification during certain periods of the school year. To apply, you need to do so between June and the end of the enrollment period. If you miss the window, you'll have to wait a few months before you're allowed to apply for the following school year.

Your academic record is the primary qualifier

When it comes to qualifications, your credit score isn't the sole factor considered when applying for a loan at Funding U. Recognizing that many undergraduates haven't built a robust credit history, the company evaluates applicants primarily based on academic accomplishments and career aspirations. Typically, upperclassmen stand a better chance due to their transcripts and better picture of their academic standing, whereas freshmen and sophomores may face more challenges due to their limited academic track record. While credit scores aren't utilized as a primary decision maker, credit history is reviewed, and documented credit issues like missed payments or collections may affect loan pre-approval.

One loan available

Funding U offers a single type of student loan: a 10-year fixed-rate loan, with discounted rates for automatic repayments. The lowest rate displayed on Funding U's website is reserved for exceptional seniors and does not represent the typical rates for most borrowers. Your actual rate will be determined by factors like creditworthiness, school year, location, and GPA. Allowed student loan amounts range from $3,000 - $20,000.

Choose between fixed or interest-only payments until you graduate

There are only two repayment options with Funding U: $20 monthly fixed payments or interest-only payments while in school and for up to 51 months afterward. Regular repayments commence six months after graduation, marking the beginning of the 10-year loan term. However, borrowers have the flexibility to make payments before the required repayment schedule without any penalties.

Up to 24 months of forbearance

While you're in school, forbearance options are limited, and usually not available during payments. If you've chosen the Interest Only repayment, you might switch to the Fixed Payment ($20) plan if desired. After graduation, you can get forbearance for up to 24 months. There appears to be no in-school deferment offered by Funding U.

No help for online students or international students

There aren't a lot of perks at Funding U. The only one we could find was that you can earn a $200 Amazon gift card if you refer a friend to Funding U. However, the lack of benefits are obvious with this company. Currently, Funding U doesn't provide loans to students attending online-only universities or offer assistance to international students. This makes Funding U much more limited than many student loan options on the market.

Borrowers aren't impressed with numbers or provisions

Finding borrower reviews for Funding U is challenging. Despite operating for at least six years, the company is primarily reviewed by business and finance bloggers. The news here isn't great. In general, Funding U has an average rating of 3.3 stars out of 5 across multiple review sites. While the company does have an "A” rating from the Better Business Bureau, borrowers don't seem particularly impressed. Complaints include a low maximum loan amount, high interest rates, no graduate student loans, and loans missing for students in many states. There's a longer list of things Funding U doesn't provide than the ones that it does. Yikes!

Doesn't serve enough students

Funding U comes across as pretty bare bones. Their offerings best serve undergraduate students who may struggle to secure affordable student loans elsewhere, but even then "affordable” is a relative term and the APRs at Funding U aren't particularly low. On top of that, Funding U needs expansion to include more states and a broader range of students beyond bachelor's degree seekers. There are tons of sites with better prices and more support for different types of students to explore instead.