It’s become hip for startup companies to cite “disruption” as their aim. Uber wanted to shake up the taxi business. Airbnb wanted to change the hotel industry. And now Funding U intends to do the same with student loans.
The company’s founders say traditional banks and lenders ask too much of students. Who has a long credit history or a deep bank account when they’re studying?
Funding U created an algorithm that looks at different data points when students need loans. The result is a quick, efficient approval process for students who might get skipped over by the big guys.
Funding U is a relatively new company, which means we have few student reviews to lean on for information. But if you’re hoping for a small loan you can get without pestering your parents, Funding U might be a good option.
Who Qualifies for a Funding U Loan?
In a perfect world, every student who needed money could get it. In reality, it’s hard for some people to obtain loans.
Most students need a co-signer with good credit. Without that, banks can’t determine risk, and they won’t offer any benefits. Funding U’s technology eliminates the need for a co-signer. 
Two main factors play a part:
- Your GPA: Lenders want to ensure that you’ll graduate. Students with good grades become employees with high salaries. You must prove that you’re doing well in class and that you’re on track to graduate.
- Your school’s history: Some institutions support their students, and they help everyone in class get a degree. Others don’t. Your school needs a high six-year graduation rate to help you get a loan.
Officials also dig into other attributes, including:
- Your major. Are you studying a topicHow Do You Make Lending Decisions? that will land you a high-paying job, or are you dabbling in something that will be fulfilling emotionally but not financially?
- Your course load. Are you taking at least 15 credits per semester?
- Your projected career. How many people who studied your field got a job? How much did they make? If you made that much, could you cover your loan payments?
- Your creditworthiness. Do you fit the attributes of someone who typically pays back debts, or are you similar to someone who walks away from such obligations?
It might seem unfair that things you can’t control (like your school’s graduation rate) can keep you from the money you need. But the founders say this is the best way to help investors feel comfortable handing out loans, even without co-signers.
Why Choose a Funding U Loan?
It’s not always easy to find the student loan that’s right for you. Options abound, and every company provides checklists of compelling data that entice you to choose them instead of all the others.
There are definite benefits associated with Funding U loans, and those could be enough to force your decision. But there are drawbacks to be aware of.
Funding U pros include:
- No co-signers. If you don’t have a relationship with an adult willing to sign for you, it’s hard to get a loan. This could be one of just a handful of companies willing to work with you.
- No fees. You won’t pay anything to open up an account, borrow money, or pay back your debt early.
- Forbearance options. You can choose to skip payments while you’re in school.
Funding U cons include:
- A relatively high interest rate. You’ll pay between 7.99% and 14.99% fixed APR for your loan. That’s higher than the rates we’ve seen from other companies.
- Few options for repayment. You must pay back your loan within 10 years of graduation. You can’t shorten or lengthen that term.
- No forgiveness options. Unlike federal student loans, this debt will stay with you until you pay it off.
Reviews provided by the company are glowing. Students say they appreciate the quick customer service and the loan transparency, and they’re happy with the whole process. 
But since the company is so new, we can’t find reviews from third-party websites we trust. It’s hard to know how people really feel about this startup. It’s possible that a clear picture will only emerge years from now.
Make a Smart Decision
When Funding U was created, the founders had a very specific student in mind. If you’re similar, this could be the solution you’ve been looking for. If not, this could be a loan you should skip.
Funding U supporters say the company is exclusively focused on students who:
- Are responsible
- Are going to class full time
- Have a strong academic track record
- Face a very small gap between what they have and what they need
Let’s focus on that last aspect for a moment.
These loans are meant for students dealing with a speed bump on the road to graduation caused by:
- Family illness
- Rising tuition fees
- Expensive books or supplies
- Additional classroom fees
You may have loans that help you tackle almost everything, including your tuition, your books, and your fees. But something unexpected happened, and it could derail you from getting a degree. You’d need to drop out to earn enough to re-enroll.
Does this sound familiar?
A loan from Funding U could be the helping hand you need to deal with this small expense. It might even help to augment other loans you already have. With it, you can move on toward graduation without feeling encumbered.
If you’re looking for a loan that covers the entire cost of your schooling, however, this company might not be right for you.
What Should You Do Instead?
If you need to borrow a great deal of money and you don’t have a co-signer to help you, consider loans from the U.S. Department of Education. These loans never require a credit check or a co-signer, and they come with perks private loans can’t touch.
For example, you could enroll in programs that tie your payment amount to your salary. That could ensure you don’t spend so much on a loan payment that you have nothing left to feed your family. Loans from Funding U don’t work like this. Neither do most other private loans.
Federal loans also come with employment-based perks. If you work in a favored industry in a needy part of the country, your entire loan balance could be forgiven after you’ve held your job for a specific time period. Private loans don’t offer this option.
It’s best to consider federal options first before diving into the private loan market. If you’ve already done that and there’s a small gap between what you have and what you need, Funding U could be the solution to make your dream of graduation a reality.
