Funding U Private Student Loans: 2025 Review

Funding U Snapshot

Funding U is an online lender that focuses exclusively on undergraduate students with no cosigner. Rather than looking at your credit score or income, Funding U looks at non-traditional metrics such as your GPA and estimated future earnings to assess your creditworthiness. Funding U’s student loan is best if you are a high-achieving undergraduate student with limited credit history and no access to a creditworthy cosigner.

Fixed APR Range: 7.49 – 12.99%

Variable APR Range: N/A

Loan Amounts: $3,001 up to $20,000 per school year

Minimum Credit Score: N/A

Best Features	Drawbacks
• You do not need a cosigner or credit history • You can get a loan based on your academic performance • Variety of repayment options • 0.5% interest rate discount if you make interest-only payments while in school • You get a dedicated Loan Officer that helps you simplify the borrowing process • DACA students with a work-eligible Social Security card are eligible	• You might be able to find a lower interest rate elsewhere • Loans aren’t available in 13 states • You have to make loan payments while you’re in school • Maximum funding amount is less than most lenders • Not accessible to students enrolled less than half-time

Compare Funding U’s Rates:

Rather than searching for lenders one-by-one, we recommend comparing Funding U’s rates with a student loan search tool. With the free Sparrow application, you can see the rates and terms you’d qualify for with 17+ premier lenders.

>> MORE: Compare Funding U’s rates to other student loans

Best Features of Funding U Student Loans

You do not need a cosigner or credit history

The majority of private lenders look at your income and credit score to assess your creditworthiness. Since most undergraduates have minimal income and limited credit, they are forced to find a cosigner who qualifies. But for many students, finding a cosigner is not an option. This is where Funding U comes in.

Funding U’s goal is to provide a loan that you can get on your own, based on hard work, tenacity, and focus – not based on the income level or credit score of a loan cosigner. By offering loans based on your academic history, employment activities, and other non-credit-based factors, Funding U allows you to take out a student loan without needing a cosigner with strong credit history. This prevents you from having to find someone to go into debt on your behalf and offers opportunities for you to take out a loan without credit history.

>> MORE: What is a student loan cosigner?

You can get a loan based on your academic performance

Funding U determines eligibility using their proprietary SMaRT™ scoring system. SMaRT™ (Student Merit and Risk Test) relies on non-credit variables incorporating 40 years of research. All such data points conform to the Federal Equal Credit Opportunities Act. The SMaRT™ scoring system is designed to predict the probability of an undergraduate college student defaulting on their student loan.

Funding U takes into account a number of factors largely based on the attributes of successful federal student loan borrowers. The lender considers:

Your academic success in college – especially in your major
Your likelihood to graduate on schedule by taking and passing about 15 credits per semester
Your projected total student debt
Your projected earnings based on your major

By basing its lending decisions on forward-looking factors, Funding U aligns itself with borrowers and encourages students to think long term.

>> MORE: Compare student loan rates across 17+ lenders

Variety of repayment options

Funding U offers you two repayment options for your student loans, both of which require you to make in-school loan payments. While in-school payments can be difficult for some borrowers, it is the best way to reduce the amount of interest you pay over time.

Repayment Option	Terms	Pros	Cons
Interest-Only Repayment	Pay only interest while you’re in school.	Your monthly payments will be more manageable, and your loan balance won’t grow while you’re in school.	You won’t make any progress paying down your loan balance while you’re a student. But at least you won’t owe more than you borrowed when it’s time to start making full payments.
Fixed Repayment	Pay $20 every month while enrolled in school and during the grace period.	You can keep your loan balance in check, and reduce the total amount repaid.	You’ll still owe more than you borrowed when you graduate, but your loan balance won’t grow as quickly.

Note: While there is no immediate repayment option, Funding U allows you to make extra payments, with no prepayment penalties, if you wish before the repayment period starts post-graduation. Those payments will reduce your loan balance.

>> MORE: The best repayment plan for private student loans

0.5% interest rate discount if you make interest-only payments while in school

If you elect to make interest-only payments while in school, you will receive a 0.5% interest rate discount. While making payments while you’re in school might be difficult, it will limit the amount of interest that accrues and lead to significant savings over the lifetime of the loan.

>> MORE: What is the average student loan interest rate?

You get a dedicated Loan Officer that helps you simplify the borrowing process

If you are pre-approved for a loan through Funding U, you will be assigned a dedicated loan officer that helps you throughout the borrowing process. Accordingly, the loan officer will discuss your student loan offer, repayment options, and academic plans to ensure you have the support you need.

DACA students with a work-eligible Social Security number can qualify

If you are a DACA recipient with a Social Security number, you are eligible for a Funding U student loan. This separates Funding U from many other lenders, which require you to be a U.S. citizen.

Drawbacks of Funding U Student Loans

You might be able to find a lower interest rate elsewhere

The interest rates on Funding U’s fixed-rate loan range from 7.49% to 12.99% without autopay. While this may seem higher than most other lenders, it is an incredible option for students who have limited credit history and no access to a cosigner. Otherwise, these students most likely wouldn’t qualify for a traditional credit-based loan.

However, if you do have a strong credit history or qualified cosigner, you might be better off going with a credit-based lender that can offer you a lower rate.

>> MORE: What is the average student loan interest rate?

Loans aren’t available in 13 states

Funding U loans are only offered to students who are residents in the following states:

Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin

If you don’t live in one of these states, complete our 2-minute form to see if you qualify and at what rate with over 17 different lenders. It’s quick, easy, and does not impact your credit score.

>> MORE: Student loan eligibility requirements

You have to make loan payments while you’re in school

While many lenders offer a deferred payment option that allows you to postpone repayment until after you’ve graduated, Funding U requires in-school payments.

Funding U’s in-school repayment options include:

Fixed repayment: Pay $20 every month while enrolled in school and during the grace period.
Interest-only repayment: Pay interest every month you’re in school and during the grace period.

In-school repayment allows you to minimize the interest that accrues, but it is a negative for those who do not want to make payments while in school. If you’re looking for a lender who offers a deferred repayment plan (payment doesn’t begin until after graduation), you may want to look at other lenders.

Maximum funding amount is lower than most lenders

Funding U offers student loans as large as $20,000 per school year. This is a great option if the gap between your federal student loans and your total cost of attendance is less than $20,000 per year.

If you need to borrow more than $20,000 per year, you might need to look elsewhere to cover the cost of your education. Several of the other private student lenders we partner with offer loans up to the total cost of attendance.

Not accessible to students enrolled less than half-time

Given that Funding U has such a strong emphasis on academic achievement, it makes sense that the lender requires you to enroll at least half-time.

If you are not enrolled in school at least half-time, you are ineligible for Funding U student loans. If you’re studying less than half-time, you may want to consider College Ave.

>> MORE: College Ave student loans review

Funding U: The Nuts and Bolts

Interest Rates, Fees, and Terms

Fixed APR Range	7.49% to 12.99%.
Variable APR Range	N/A
Loan Terms	10 years.
Loan Amounts	$3,001 up to $20,000 per school year.
Ability to transfer a parent loan to the student	Did not disclose.
Application or Origination Fee	No.
Prepayment Penalty	No.
Late Fees	No.

Eligibility Requirements – Financial

Minimum Credit Score	No credit required, but borrowers can’t have a history of delinquency.
Minimum Income	No minimum, but borrowers must demonstrate they can make monthly in-school payments.
Typical Credit Score of Approved Borrowers	640.
Typical Income of Approved Borrower	Did not disclose.
Maximum Debt-to-Income Ratio	Funding U uses salary and student loan data to estimate your post-graduation debt-to-income ratio. The maximum ratio is 20%.
Ability to qualify if you’ve filed for bankruptcy	No.

Eligibility Requirements – Personal

Citizenship	Must be a U.S. citizen, permanent resident or DACA recipient with a work-eligible Social Security number.
Location	Available only to residents of Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.
Must be enrolled half-time or more	Full-time only.
Types of schools served	Borrowers must attend nonprofit colleges that meet the following 6-year graduation rate requirements and have the following minimum GPA: • 90% graduation rate for freshmen with a 3.5 high school GPA. • 70% graduation rate for sophomores with a 3.0 GPA. • 50% graduation rate for juniors with a 2.75 GPA. • 50% graduation rate for seniors with a 2.5 GPA.
Percentage of borrowers who have a cosigner	N/A — no cosigner allowed

Repayment Options

In-school repayment options	Interest-only repayment: Pay interest each month you’re in school and during the 6-month grace period. Fixed repayment: Pay $20 each month while enrolled in school and during the 6-month grace period. *Note:* Funding U does not offer a full principal and interest repayment option, but borrowers can opt to pay more than what’s required.
Grace period	6 months, but only for the deferred repayment option
In-school Deferment	Yes, up to 24 months.
Military Deferment	Yes, up to 24 months.
Forbearance	Borrowers are eligible for 24 months of forbearance, in 90-day increments, if they have an economic hardship, are completing a medical residency or are affected by a natural disaster.
Cosigner Release	N/A — No cosigner allowed.
Death or Disability Discharge	Funding U will discharge loans in the event of the death of the borrower. Should the borrower become disabled, Funding U offers up to 24 months of deferment for temporary disability and up to 60 months deferment for permanent or complete disability.
Loan discharge if cosigner dies or becomes disabled	N/A — No cosigner allowed.
Autopay	Allows for surplus payments via autopay: No. Allows for biweekly payments via autopay: No.

Customer Service

Loan Servicer	Scratch.
In-house Customer Service Team	Yes.
Process for Escalating Concerns	Yes.
Borrowers get assigned a personal customer service representative	Yes.
Average time from application to approval	Pre-approval happens immediately. Official approval typically takes 3 days.

Before you take out a loan from Funding U…

Complete the Sparrow application to compare real rates from more than 17 different lenders to make sure you’re getting the best rate possible.

See real rates, not rate ranges or estimates: Sparrow’s rates mimic those of our lenders so you know what rate you’re getting from each lender.

No impact on your credit score: Checking your rates on Sparrow won’t impact your credit score.

Data Privacy: Sparrow doesn’t sell your information, so don’t worry about getting calls from that random number that won’t leave you alone.

FAQ

Is Funding U a legitimate lender?

Yes, Funding U is a legitimate lender. The company was founded in 2016 to support students who have strong projected income but do not have the credit history or access to cosigners to take out credit-based private student loans.

How long does it take to get a Funding U student loan?

Submitting an application through Funding U takes a few minutes. Once you’ve submitted your loan application, Funding U will instantaneously return a decision about your eligibility. If you qualify, you will receive the rate and terms of your loan.

Your school must approve the loan which may take between four to six weeks.

What happens if I don’t qualify for a Funding U student loan?

If you don’t qualify for a Funding U student loan, the company will inform you why. Depending on the reason, you may consider applying with a different lender. To check your rates across multiple lenders at once, try using Sparrow’s free student loan search engine. In just two minutes, you can receive real, personalized offers from over 15 different lenders all bidding for your business.

Are Funding U student loans federal or private?

Funding U’s loans are private loans. Before you take out a private student loan, we recommend that you exhaust your federal funding options, including grants and scholarships.

>> MORE: Types of financial aid for college students

Does applying for a loan through Funding U hurt my credit score?

In order to estimate what rate you qualify for, Funding U may conduct a “soft credit check” — this does not affect your credit score. If you choose to accept the Funding U loan, the company will conduct a hard credit check to verify your information. A hard credit check may temporarily impact your credit score.

See Funding U’s disclosures here.