MPOWER vs Funding U: Which no-cosigner lender fits your situation

Short answer: Choose MPOWER Financing if you are an international student, DACA recipient, or refugee studying in the U.S.; choose Funding U if you are a U.S. citizen or permanent resident who needs to borrow without a cosigner. For families, the right choice helps protect household credit by avoiding cosigning; for students, it offers a path to graduation based on future potential rather than past credit history.

For many families and students, the gap between federal financial aid and the total cost of college creates a stressful financial hurdle. This situation becomes even more complicated when traditional private lenders reject applications due to a lack of credit history or the absence of a qualified cosigner. You might find yourself asking: “How can I secure the remaining funds needed for tuition without putting family finances at risk?” The answer often lies in specialized lenders designed specifically for these scenarios, but choosing the wrong one can lead to wasted time and rejected applications.

In this guide, you will learn exactly how to distinguish between MPOWER Financing and Funding U, two leading lenders that do not require cosigners. We will compare their specific eligibility requirements, interest rate structures, and unique underwriting approaches that look beyond credit scores. By understanding the distinct borrower populations each lender serves, you can determine which option best fits your citizenship status and academic goals. Whether you are a parent looking to avoid the risks of cosigning or a student navigating independent borrowing, this comparison will provide the clarity needed to make an informed borrowing decision.

Context: When MPOWER or Funding U makes sense

Before diving into the specific features of each lender, it is important to understand where MPOWER Financing and Funding U fit within the broader student loan landscape. Both lenders operate in a specialized niche of the private student loan market, designed to serve borrowers who are typically underserved by traditional banks. Most standard private lenders require a strong credit history or a creditworthy cosigner—requirements that disqualify a significant number of students. MPOWER and Funding U exist to fill this gap, but they do so for two fundamentally different groups of people.

MPOWER Financing was built with a specific mission: to serve international students, DACA recipients, refugees, and asylum seekers. These students often lack a U.S. credit history entirely and cannot easily secure a U.S.-based cosigner, making traditional loans impossible to obtain. Funding U, on the other hand, focuses on domestic students—U.S. citizens and permanent residents—who may not have a credit score yet or access to a cosigner but have strong academic potential. While both lenders offer “no-cosigner” loans, there is minimal overlap in who they serve. Your citizenship or immigration status is the primary filter that determines which of these two lenders is a viable option for your education financing.

Why it matters: Choosing the right no-cosigner lender

MPOWER vs Funding U at a glance: Quick comparison

If you need to quickly determine which lender aligns with your profile, this comparison table highlights the most critical decision factors. While both lenders remove the barrier of needing a cosigner, their loan terms, eligibility criteria, and borrower benefits differ substantially. Use this data to identify which lender fits your residency status and financial needs before reading the detailed breakdowns below.

Source: MPOWER.com and FundingU.com (as of May 2025)

As the table illustrates, the dividing line is clear. If you are an international student, MPOWER is likely your primary option. If you are a domestic undergraduate student without a cosigner, Funding U is designed for you. With this high-level view established, the following sections will dive deeper into the specific eligibility rules and costs associated with each lender.

Eligibility requirements: Who qualifies for each lender

Determining your eligibility is the first and most important step in the application process. Because MPOWER and Funding U serve such distinct populations, you will likely qualify for only one of them. Understanding the nuances of their requirements can save you from submitting an application that is destined to be rejected.

According to MPOWER, as of May 2025, to qualify for a loan, you must be an international student, DACA recipient, refugee, or asylum seeker, though U.S. citizens and permanent residents are also eligible but often have other options. MPOWER supports students who are often shut out of the U.S. financial system. Additional requirements include:

• Be admitted to or enrolled in one of the 400+ approved schools in the U.S. or Canada.
• Be within two years of graduating from your program.
• Pursue a degree program that MPOWER supports (typically high-demand fields like STEM, business, and healthcare are prioritized due to earning potential).
• Have no requirement for a U.S. credit history or a cosigner.

According to Funding U, as of May 2025, eligibility requirements focus strictly on the domestic market for students navigating college costs independently:

• Must be a U.S. citizen or permanent resident (Green Card holder). International students are not eligible.
• Must be enrolled full-time at an eligible four-year non-profit college or university. Funding U has a specific list of approved schools, so verification is essential.
• Must be an undergraduate student. Funding U does not currently lend to graduate students.
• No cosigner is required, and there is no minimum credit score threshold. The lender is designed specifically for students with little to no credit history.

For both lenders, the school you attend plays a major role in your eligibility. Unlike federal loans, which are available at nearly all accredited institutions, private lenders like these carefully select partner schools based on graduation rates and alumni outcomes. Before assuming you qualify, check each lender’s website to ensure your specific college is on their approved list. For more context on general private loan requirements, review our guide to private student loans.

Interest rates and APR: Comparing borrowing costs

Once you have confirmed your eligibility, the next critical factor is the cost of borrowing. Both MPOWER and Funding U offer fixed interest rates, which provides stability by ensuring your monthly payment amount will never change. However, because these loans do not require a cosigner or a high credit score, the interest rates are generally higher than what you might find with a cosigner-backed loan from a traditional bank.

According to MPOWER, as of May 2025, fixed interest rates typically range from roughly 11.00% to 15.00%. MPOWER offers a simple rate structure to streamline the process for international borrowers. It is crucial to look at the Annual Percentage Rate (APR), which accounts for the interest rate plus any origination fees. MPOWER’s APRs reflect the inclusion of an origination fee, which is standard for their loan products. Your specific rate may depend on your school, degree program, and how close you are to graduation.

According to Funding U, as of May 2025, fixed rates are 7.99% - 13.49%. Funding U also utilizes a fixed-rate model. Like MPOWER, Funding U uses an underwriting model based on your academic success and projected future earnings rather than a credit score. This means students in majors with higher projected starting salaries or strong GPAs may qualify for more competitive rates within that range.

When comparing these rates, remember that you are paying for access and risk mitigation. Traditional private loans might offer rates as low as 5% or 6%, but those almost exclusively require a creditworthy cosigner. According to Mark Kantrowitz, financial aid expert, “Private loans can offer variable interest rates, which may be lower than federal fixed rates initially,” but for borrowers without cosigners, the fixed-rate options from MPOWER and Funding U provide necessary predictability. While the rates are higher, they are often the only private option available for their specific borrower bases.

Some lenders may offer rate reductions for setting up automatic payments. Be sure to check if an autopay discount (typically 0.25%) applies, as this can slightly lower your total interest cost over the life of the loan.

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Loan amounts and covered expenses

Understanding the interest rate helps you calculate the cost of every dollar borrowed, but you also need to know if you can borrow enough to cover your funding gap. Both lenders have minimum and maximum limits that may affect how you structure your financial aid package.

According to MPOWER, as of May 2025, borrowers can receive between $2,001 and $50,000 per academic period, with a lifetime aggregate limit of $100,000. MPOWER provides substantial funding for tuition and living expenses. It is important to note that the loan amount must be certified by your school’s financial aid office and cannot exceed the total Cost of Attendance (COA) minus other financial aid received.

According to Funding U, as of May 2025, loan amounts range from $3,001 to $20,000 per academic year. Funding U offers limits tailored to undergraduate needs. While the annual limit is lower than MPOWER’s, it is often sufficient to cover the gap remaining after federal loans and scholarships. The aggregate lifetime limit for Funding U loans is typically capped around $75,000.

Both lenders allow funds to be used for qualified educational expenses. These typically include:

• Tuition and mandatory fees
• Room and board (on-campus or off-campus housing)
• Books and supplies
• Health insurance (often required for international students)
• Transportation and personal expenses included in the school’s COA

Before applying, you should calculate your exact funding gap using our Cost of Attendance guide to ensure you request the correct amount. Remember, the school will ultimately verify the amount you are eligible to receive.

Repayment terms and options

How you repay your loan is just as important as how much you borrow. The repayment structure determines your monthly obligation both while you are in school and after you graduate. MPOWER and Funding U have different expectations for borrowers during the in-school period.

According to MPOWER, as of May 2025, the lender generally requires borrowers to make interest-only payments while they are in school and for six months after graduation (the grace period). This ensures that the loan balance does not grow while you are studying. The standard repayment term is 10 years. There is no penalty for prepayment, so you can pay off the loan faster if your income allows. This structure is designed to build credit history and discipline before full principal and interest payments begin.

According to Funding U, as of May 2025, the lender offers a standard 10-year repayment term. Borrowers may have the option to make interest-only payments or fixed partial payments (e.g., $20/month) while in school, depending on the specific loan offer. Like MPOWER, there is a six-month grace period after leaving school before full repayment begins. There are no prepayment penalties, giving you the flexibility to reduce your debt burden aggressively once you are employed.

The requirement for in-school payments is a key differentiator. MPOWER’s interest-only requirement means you need to have some cash flow while studying, which can be challenging for some international students but ultimately saves money on interest accrual. Funding U’s options may provide slightly more flexibility for domestic undergraduates with limited income. Both lenders focus on a 10-year term to keep monthly payments manageable compared to shorter-term loans.

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Borrower benefits and unique perks

Beyond the raw numbers of rates and terms, both MPOWER and Funding U offer “soft” benefits that add significant value, particularly given the unique challenges their borrowers face. These perks are designed to support your academic journey and career transition.

• Visa support: MPOWER provides support letters for I-20 forms and visa applications, a critical service for international students navigating complex U.S. immigration rules.
• Career services: They offer a robust career support program, including resume reviews and networking opportunities, to help international students secure high-paying roles in the U.S. or abroad.
• No cosigner release needed: Since no cosigner is ever required, you never have to worry about the complex process of releasing one later.
• Credit building: They report payments to U.S. credit bureaus, helping international students establish a U.S. credit score.

• Merit-based rewards: Funding U values academic performance and may offer benefits or favorable terms to students who maintain strong GPAs.
• Financial literacy tools: The platform provides resources to help undergraduates understand debt management and budgeting.
• Career support: Funding U partners with organizations to help students find internships and jobs, protecting their investment in your future earnings.
• Credit building: Payments are reported to credit bureaus, allowing students with “thin” files to build a robust credit history.

According to Mark Kantrowitz, financial aid expert, “Private lenders sometimes offer benefits like autopay discounts or career support.” For MPOWER borrowers specifically, the visa support and career services can be just as valuable as the loan itself, as securing a high-paying job in the U.S. is often the key to successful repayment.

How each lender evaluates applications

Since neither lender relies on traditional credit scores or cosigners, you might wonder: “How do they decide who gets a loan?” Both MPOWER and Funding U utilize proprietary underwriting models that look forward at your potential rather than backward at your history.

MPOWER uses a forward-looking model that assesses your future earning potential. They evaluate the quality of your school, your specific degree program, and your expected graduation date. Students in high-demand fields like engineering, computer science, and business often have an advantage because data shows they are likely to secure high incomes post-graduation. They also verify that you are within two years of graduating, reducing the risk that you will drop out before completing your degree.

Funding U employs a similar data-driven approach, often referred to as a “SMART” underwriting model. They analyze historical data regarding your chosen major, your university’s graduation rates, and projected starting salaries for your field. Academic performance is a significant factor; a higher GPA can signal a higher likelihood of graduation and employment. Like MPOWER, they do not require a minimum credit score, but they do look for responsible financial behavior if any credit history exists.

This approach means that your choice of major and school matters more with these lenders than with almost any other. A student majoring in a STEM field at a university with high graduation rates is viewed as a lower risk than a student with an undeclared major at a school with lower retention. For more on how lenders evaluate risk, see our student loans guide.

Fees and additional costs

When calculating the total cost of your loan, you must account for fees, which are more common in the no-cosigner niche than in the broader private loan market. These fees are typically included in the APR calculation but affect your loan balance directly.

According to MPOWER, as of May 2025, the lender typically charges an origination fee of around 5% of the loan amount, which is added to your loan balance at the time of disbursement. Both MPOWER and Funding U typically charge an origination fee. Funding U also charges an origination fee, which may range from 4% to 5% depending on the loan terms. This means if you borrow $10,000, you might actually be responsible for repaying $10,500 plus interest, or receive slightly less than the requested amount.

In addition to origination fees, be aware of standard administrative fees:

• Late payment fees: Charged if your monthly payment arrives after the due date (typically a percentage of the missed payment or a flat fee).
• Returned payment fees: Charged if a payment bounces due to insufficient funds.

Neither lender charges a prepayment penalty. This is a crucial feature, as it allows you to pay off the loan early to save on interest without incurring any extra cost.

Which lender is right for you: Decision framework

Making the final choice comes down to matching your personal profile with the lender’s specific mission. Use this framework to confirm your decision.

• You are an international student, DACA recipient, refugee, or asylum seeker studying in the U.S. or Canada.
• You do not have a U.S. credit history or access to a U.S.-based cosigner.
• You are attending one of MPOWER’s 400+ partner universities.
• You are within two years of graduating from your degree program.
• You value additional support for visa and immigration processes.

• You are a U.S. citizen or permanent resident (Green Card holder).
• You are an undergraduate student enrolled full-time.
• You have little to no credit history and cannot find a cosigner.
• You attend one of Funding U’s eligible non-profit colleges.
• You want a loan based on your academic hard work and future career potential.

• You have not yet exhausted your federal student loan options. Federal loans almost always offer lower rates and better protections. Review our federal loans guide first.
• You have access to a creditworthy cosigner. Adding a cosigner could unlock significantly lower interest rates from traditional private lenders.
• Your school is not on either lender’s approved list.

Before applying to either, ensure you have completed the FAFSA. Read our FAFSA guide to maximize your access to grants and federal aid.

Frequently asked questions

References and resources

For further information and to verify the latest terms, please consult the following resources:

• MPOWER Financing Official Website
• Funding U Official Website
• StudentAid.gov – The official source for federal student aid information.
• Guide to Federal Student Loans
• Guide to Private Student Loans
• Complete FAFSA Guide
• Scholarship Search Strategies