Funding U Private Student Loans: Pros, Cons, and Reviews

Written by: Kristyn Pilgrim
Updated: 10/29/20

CollegeFinance Score: ★★★★☆

Funding U aims to disrupt the student loan industry with its atypical approach to private lending. Loans are awarded based on students’ academic achievements rather than their creditworthiness, and no co-signer is required. Unfortunately, Funding U only offers loans in 30 states. Also, keep in mind that your repayment begins while you’re still in school.


  • No co-signer required
  • Loans are awarded based on your GPA and resume rather than only on income and credit score
  • No fees for anything — application, origination, cancellation, or prepayment
  • In-school repayments allow you to pay down interest and build your credit
  • Students can borrow $3,001 to $10,000 to cover what financial aid packages don’t
  • Quick and efficient approval process
  • See if you qualify without a hard credit check


  • Monthly repayment starts while you’re still in school
  • Loans are only available in 30 states
  • Maximum funding is only $10,000 each school year, which is less than many other lenders
  • A relatively high fixed APR between 7.99% and 13.49% (with autopay)
  • Borrowers have no term options — all loans must be repaid within 10 years
  • Funding not provided for summer school classes

Funding U: What You Need to Know

In 2016, Atlanta-based Funding U established its no co-signer loan in Georgia. Two years later, this lender expanded across the country, and today, it offers loans to residents in 30 states. To date, the company has originated $4 million in student loans.

In addition to not requiring a co-signer, Funding U stands apart from traditional private student lenders in other ways. The company was formed with the intention of stepping up to fund what federal financial aid packages don’t cover. It’s also designed to reward hardworking students by awarding loans based on their grades, course load, job experience, and graduation track.

Although Funding U currently only offers undergraduate loans, it plans to expand in the future. In the works are personal loans for recent college graduates, refinancing options, and the ability to release your co-signer from your original student loans.

With its modern approach to lending, Funding U prides itself on supporting strong students, no matter their family’s credit history or income.

Funding U’s BBB Rating: A+

Funding U prides itself on providing a positive borrowing experience and a financially sound lending option to students. The Better Business Bureau (BBB) backs up this claim by awarding the lender an A+ rating for its performance.

For more than 100 years, the BBB, a private nonprofit organization, has provided consumers with the information they need to make smarter buying decisions. The organization compiles and assesses customer complaints about businesses across the United States. It also maintains an A+ through F rating system based on how businesses are likely to interact with customers.   

The BBB considers numerous factors when calculating these letter grade ratings. Among the factors taken into consideration by the organization are a business’s customer complaint history, the industry it’s in, the length of time in business, transparency regarding business practices, licensing and government actions against the business, and advertising issues.

Funding U’s A+ rating, the BBB’s highest rating, reflects its commitment to helping students achieve their academic goals. Notably, according to the BBB, there are no customer complaints against the lender.

Funding U: Potential Benefits for Borrowers

If you’re a high-achieving student with no co-signer, and you’re looking to borrow a low amount to cover gaps in college funding, Funding U could be a great choice for you. 

  • Funding U doesn’t require a co-signer. Unlike many traditional private student loan lenders, if you have no or bad credit history, Funding U doesn’t require that you have a co-signer on your loan. This makes additional funding available to students who otherwise wouldn’t be approved on their own.
  • Funding U bases loan approval on your academic successes. Instead of looking at your income or credit score, Funding U makes all lending decisions based on your GPA, job experience, and graduation track. For hardworking but low-income students, this loan could be a saving grace.
  • There are no additional fees for anything. Throughout your entire relationship with Funding U, from the application phase to paying off your loan, there are no additional fees. This includes loan origination, cancellation, and prepayment.
  • Get ahead of the game with in-school repayments. Not everyone will be pleased that repayment begins while you’re still in school, but there are some major benefits to having a low monthly payment while in college. These fees will help you pay down the interest that accrues on your loan. On-time payments also help improve your credit score.  
  • Funding U helps undergraduates cover gaps in funding. More often than it should happen, financial aid packages fall short of covering all of a student’s educational costs. Sometimes, just a few thousand dollars might make the difference between a student attending university and not. Funding U targets these funding gaps by letting undergraduates borrow only lower amounts of $3,001 to $10,000.
  • Find out quickly if you’re approved for a loan. It takes just 30 seconds to find out if you’re eligible to borrow from Funding U. Then after you fill out a loan application, you’ll hear from the lender within five business days. After that, once you start working with a Funding U loan officer, the process takes one to three days.
  • There’s no hard credit check if you apply. If you’re concerned about your credit score, you can rest easy knowing that there’s no hard credit check just for seeking pre-approval through Funding U.

Funding U: Potential Drawbacks for Borrowers 

Of course, not every lender will be a perfect fit for every student’s educational and financial needs. And there are some areas of improvement that would allow Funding U to deliver an even better customer experience. For instance, this lender could improve by allowing students to defer repayment until after they graduate and lower their APR. 

  • You start paying back your loan while in school. Funding U requires borrowers to start paying back their loans while attending college. Students have the option of paying a minimum of $20 per month or the interest only. While these payments sound nominal, this might seem like a lot of money to young college students working on finishing their degrees. Not all students will be able to fit this into their monthly budget.
  • Funding U only works with residents of certain states. Although Funding U continues to expand, it still only offers loans to students in 30 states. This means there are students in 20 states who don’t have the option of accessing funds through this lender.
  • Funding U offers a maximum of $10,000 each school year. The most any student can borrow from Funding U each school year is $10,000. This is much less than many private student lenders. Any student who needs to borrow more than this amount needs to look elsewhere to fund their education.
  • Borrowers have no options regarding the length of their loan. Funding U requires all borrowers to repay their loans within 10 years. Students have no options when it comes to term lengths and, therefore, no say in what is best for their financial plans and circumstances.
  • Borrowers are subject to a high fixed APR. Compared to other private student lenders, Funding U’s fixed APR — between 7.99% and 13.49% — is relatively high. Students should think about the long-term repercussions of taking on a loan with this APR.
  • Funding U doesn’t provide loans for summer classes. If you’re looking for funding to pay for summer classes, you’ll have to look elsewhere. Funding U only awards loans for fall and spring semesters. 

Funding U: The Details

Loan Amounts and Term Lengths

Minimum loan amount: $3,001

Loan term options: 10 years

Multi-year approval available: Not disclosed

Interest Rate Ranges

Fixed and variable rates available: Fixed only

Fixed low APR: 7.99%

Fixed high APR: 13.49%

Variable low APR: Not applicable

Variable high APR: Not applicable

Repayment Options

In-school payment options: Borrowers must begin making payments while in school. They are required to pay a $20 minimum or interest-only payments each month and can choose to make extra payments.

Grace period: Loan repayments begin six months after graduation.

Co-signer release available: Not applicable, as Funding U doesn’t require co-signers

Loan servicer: Scratch

Other Perks and Options

Interest rate discounts: 0.5% discount available to borrowers who sign up for autopay

Other rewards or services: Not disclosed

Funding U: Eligibility and Application Requirements

Eligibility Details

Academic requirements: Funding U has minimum GPA and graduation rates in place for students and educational institutions based on the borrower’s class year.

  • Senior year
    • Minimum GPA: 2.5
    • Institution’s six-year graduation rate: 50%
  • Junior year
    • Minimum GPA: 2.75
    • Institution’s six-year graduation rate: 50%
  • Sophomore year
    • Minimum GPA: 3.0
    • Institution’s six-year graduation rate: 90%
  • Freshman year
    • Minimum GPA: 3.5
    • Institution’s six-year graduation rate: 90%

Income requirements: None

Credit score requirements: None

Eligibility for international borrowers: Funding not available to students attending schools outside the United States

Application Details

Application or origination fees: None

Soft pull rate check availability: Funding U offers a soft pull credit check for students seeking loan pre-approval.

Private Student Loans: Understanding Your Options

While Funding U offers many advantages to borrowers, do your research, and weigh your options before making this important financial decision. After all, your student loans will follow you for years to come.

Most importantly, exhaust all free financial aid and federal student loans before committing to private student loans.

Each year, the United States government provides more than $120 billion in financial aid assistance to students attending college or technical school through the Department of Education.

Federal student loans are generally the more favorable option when compared to private lenders. They often offer lower fixed interest rates and income-based repayment and deferment options. Also, loan forgiveness is available to graduates who participate in various public service programs.

When it comes to most federal student loans, your credit score won’t affect whether you receive funding. And since your eligibility is based on demonstrated financial need, a co-signer is often not required.

Private student loans are offered by various financial institutions, including banks and credit unions. Their terms vary by lender, and they tend to have higher, fluctuating interest rates. Private lenders are also known for being less forgiving when it comes to postponing or decreasing payments.

Of course, private lenders are useful in supplementing federal student aid if you’re not eligible for the full amount needed to cover your educational expenses. A lender like Funding U is ideal in this situation, as it is designed to loan smaller amounts of money to cover these gaps.

Is Funding U Right for You?

Although it’s still a relatively young company, Funding U stands out compared to other private student lenders. As a lender, it knows that you’re more than just a credit score, and they incorporate this into their business model. Your eligibility weighs heavily on your academic achievements rather than your credit history and family income. Also, co-signers aren’t required to obtain a loan.

However, there are some drawbacks to keep in mind, including loan repayment starting while in college, a high fixed APR, and a maximum funding limit of $10,000 each school year. 

It’s a good complement to federal student loans, though, which should always be your first option. Borrowers seeking a low amount of funds to cover any gaps in their federal financial aid package will likely be drawn to Funding U.

Funding U Could Be a Good Option for You If:

  • You don’t have a co-signer.
  • You’re a hardworking student with good grades.
  • You’re seeking between $3,001 and $10,000 for expenses not covered by your federal financial aid package.
  • You’re unfazed by in-school repayments that begin immediately. 

Even if Funding U sounds like a good fit for your financial circumstances, do some additional research before committing to a private student lender. Look at all possible lenders and compare every facet of what they have to offer: repayment terms, APR, eligibility, amount offered, etc.

As you make this important decision, is an excellent resource to help you assess potential lenders. Our website showcases information about loan options and lender reviews.

The choices you make today will impact your financial future beyond college, and we want to start you off on the right foot. Covering a vast range of topics, can be by your side as you make decisions about funding your education — whether you want to learn more about scholarships and grants, choosing the best lender, and repaying or refinancing your student loans.