Business Insider's personal finance team compared Funding U Undergraduate Student Loans to the best private student loans and found them to have some significant drawbacks when it comes to loan types, repayment terms, and availability throughout the U.S. However, it could be a good option if your credit score is too low to qualify with other lenders.
Funding U only offers undergraduate student loans for amounts of $3,001 to $20,000 per school year without a cosigner — a lower maximum than some other lenders.
Before taking out private student loans, be sure to explore your federal student loan, scholarship, and grant options first. Federal student loans come with protections that private student loans don't offer, such as lower fixed interest rates and student loan forgiveness.
Funding U Student Loans Pros & Cons
Funding U Student Loan Pros
- No fees. Funding U doesn't charge application fees, origination fees, prepayment penalties, or late fees.
- Merit-based student loans. Loans aren't based solely on creditworthiness and don't require you to find a cosigner.
- Generous referral program. Existing Funding U borrowers can earn a $200 Amazon gift card when a new student successfully receives a Funding U loan using the existing borrower's referral link.
- Graduation Reward Program. Funding U will send you a $100 Amazon gift card if you previously received a Funding U and have since graduated with your Bachelor's degree.
Funding U Student Loan Cons
- Low maximum loan amount. You can only borrow up to $20,000 per academic year.
- Relatively high interest rates. Fixed interest rates for Funding U student loans are slightly higher than average.
- Limited repayment terms. Funding U only has five or 10-year repayment terms available.
- Not available in every state. Loans aren't available for residents of Alaska, Idaho, Kentucky, Maine, Mississippi, Montana, New Hampshire, Nevada, New York, or Wyoming.
- Only available to undergraduates. Funding U does not currently offer graduate student loans or student loan refinancing.
- No variable-rate loans. This lender only offers fixed interest rates.
Apply for a Student Loan
7.99% - 13.49% fixed (with AutoPay)
No fees
Undisclosed
$3,001 — $20,000
- No prepayment, origination, or late fees
- No cosigner needed
- Low maximum loan amount
- Relatively high APRs
- One repayment term option
- Loans unavailable for residents of 19 states
- Only fixed-rate loans
- Limited customer support options
- Apply through your computer or mobile device
- Customer service available via email
- 10-year repayment term
- Loan minimum of $3,001, maximum up to $15,000
- Residents of AL, AK, DE, ID, KY, LA, MA, MN, MS, MO, NV, NH, ND, OK, RI, SD, UT, WA, and WY ineligible for loans
- No cosigner allowed
- Loans made through Funding University
Compare Funding U
4.44% - 17.99% variable and 3.47% - 17.99% fixed (with AutoPay discount)
late payment of 5% of the amount due, capped at $25
mid-600s
Minimum of $1,000
- No prepayment or origination fees
- International students eligible with an eligible cosigner
- Low APR
- Multiple options for repayment term length
- Many ways to contact customer support
- Credit check required
- Late payment fee
College Ave is a great lender for borrowers who want multiple options for repayment term lengths and are after a low APR. College Ave also offers many options for contacting customer support.
College Ave- Apply through your computer or mobile device
- Customer service available via phone, text, email, and live chat
- Five, eight, 10, or 15 year repayment terms available
- Loan minimum of $1,000, maximum up to 100% cost of attendance
- Repayment options available:
- Deferred: No payments for up to six months after leaving school
- Interest only: Only make payments on the loan's interest while in school
- Partial payments: Pay $25 per month while in school
- Full repayment immediately: Start making full payments while still in school
- Loans made through Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC
4.64% - 15.99% variable and 3.54% - 15.99% fixed (with AutoPay discount)
N/A
Undisclosed
Minimum of $1,000
- No origination fees, prepayment penalties, or late fees
- Solid APR
- Several options for repayment term length
- Quick application process
- Credit check required
SoFi is an excellent lender for borrowers who want a competitive APRs. It's also a great lender for those who don't want to worry about fees.
SoFi Undergraduate Student Loans- Apply through your computer or mobile device
- Customer service available via phone, mail, and social media
- Five, seven, 10, or 15 year repayment terms available
- Loan minimum of $1,000, maximum up to 100% cost of attendance
- Loans are originated by SoFi Lending Corp. or an affiliate
5.01% - 14.02% variable and 3.39% - 13.76% fixed (with AutoPay discount)
None
Undisclosed
- No prepayment or origination fees
- Low minimum fixed rate APR
- Many options for repayment term length
- Multiple ways to contact customer support
- May be eligible without a cosigner
- Cashback reward after graduation
- Higher rates for non-cosigned loans
Ascent provides a variety of repayment term lengths on its student loans and low minimum interest rates on fixed-rate loans. You may also qualify for a 1% cash-back reward that will be paid to you after graduation.
Ascent Undergraduate Cosigned Credit-Based Loan- Apply through your computer
- Customer service available via phone, email, and physical mail
- Provided you are eligible, you'll receive 1% of your initial loan balance as a cashback bonus after graduation
- Five, seven, 10, 12, 15, or 20-year repayment terms available (20-year term only available for variable loans)
- Loan minimum of $2,001*, maximum up to 100% cost of attendance per term
- *The minimum amount is $2,001 except for the state of Massachusetts. Minimum loan amount for borrowers with a Massachusetts permanent address is $6,001.
- Overall maximum loan amount of $200,000
- Loans made through Bank of Lake Mills, Member FDIC
Funding U Student Loan Application Process
Eligibility Requirements
To be eligible for a Funding U student loan, you must meet the following requirements:
- You're a U.S. citizen, permanent resident, or DACA recipient
- You're at least 18 years old at the time of application
- You're a full-time undergraduate student at a participating partner schools
- You are a resident of an eligible state (not a resident of Alaska, Idaho, Kentucky, Maine, Mississippi, Montana, New Hampshire, Nevada, New York, or Wyoming)
Step-by-Step Application Process for Funding U Student Loans
1. Get preapproved. Fill out the form on Funding U's website to determine if you are eligible and get preapproved for a loan.
2. Upload any additional documentation as needed. Funding U may request additional information before preapproving your loan application.
3. Talk to a Funding U loan advisor. The lender will assign a loan officer who will assist you with details like your loan offer, repayment options, interest rate and terms.
4. Review and sign your loan offer. Carefully review all the details in the final loan offer Funding U sends you. Then sign your loan offer documents. The loan details will be sent to your school for final approval.
Required Documentation
To apply for a student loan with Funding U, you must have specific documents including your driver's license or other identification, school transcripts, financial aid award letter, and tuition bill.
Funding U Student Loan Interest Rates and Fees
Current Interest Rates
Funding U's interest rates for undergraduate student loans in the 2024 to 2025 school year range from 7.99% - 13.49% fixed (with AutoPay). Rates are slightly higher without Autopay.
Currently, the average private student loan interest rates range are around 10%, so Funding U's rates are in line with or slightly higher than average, depending on where your exact rate falls within the range.
Fee Structure and Loan Terms
Borrowers won't need to worry about prepayment fees, origination fees, disbursement fees, or late payment fees. However, Funding U requires monthly payments from borrowers while they are still in school. Repayment terms range from five to 10 years.
Available Repayment Plans
Funding U offers fixed and interest-only repayment options. Traditional repayment begins six months after graduation, but borrowers can start earlier if they leave school or drop to part-time status. Extra payments are encouraged and can lower your balance without prepayment penalties.
Deferment and Forbearance Options
Funding U offers various forbearance options for students facing financial hardship and for those hoping to continue their education post-graduation. It offers forbearance options for both students in school and graduates who are in repayment.
Borrowers still in school will have the opportunity to apply for a forbearance applied in 90-day increments, based on the following reasons:
- Medical residency
- Economic hardship
- Military deployment
- Total permanent disability
- Temporary hardship
- National disaster
Borrowers in repayment will have the opportunity to apply for a forbearance in 90-day increments based on the following reasons:
- Unemployment
- Pursuing further studies for a graduate degree at an eligible school
- Any medical residency
- Economic hardship
- Military deployment
- Total permanent disability
- Late School Notification
- Temporary hardship
- National disaster
Funding U Student Loans Overview
Funding U Undergraduate Student Loans are a worthwhile option if your credit score is too low to qualify with another student loan lender because it takes academic factors into account when making loan approval decisions. But you can't apply with a cosigner and are likely to pay a higher rate than you would with a lender that offers that option.
This lender may be helpful if you're trying to build your credit because Funding U will report your in-school payments to credit bureaus, which could help increase your credit score over time.
Funding U Student Loan Key Features and Benefits
Funding U don't have the best rates, with higher minimum APRs than other private student loan lenders. The company also doesn't offer variable-rate loans, so you'll have to take a fixed-rate loan.
Funding U doesn't make lending decisions solely based on creditworthiness. It will also consider factors like your academic performance and potential career success when deciding whether to offer you a loan.
Funding U won't charge any origination, prepayment, late, or application fees. You must take out a loan with a five or 10-year repayment term.
You should go after federal student loan options before considering private student loan, including one with Funding U, as you can usually get better terms and protections through the government.
If you want to contact Funding U's customer support, you must reach out during business hours, which are Monday through Friday, 8:30 a.m. to 8:30 p.m. ET. You can schedule a phone call with a loan advisor or use the chatbot on the Funding U website. Another option is to email Funding U at info@funding-university.com. The lender claims to respond to emails within two business days.
Types of Funding U Student Loans
Funding U Undergraduate Student Loans
Funding U offers undergraduate student loans but no graduate loans. You can't apply with a cosigner, and your loan eligibility is based on a proprietary system developed by Funding U that takes into account your collegiate academic success, likelihood to graduate on time, and credit history, among other factors.
Funding U Student Loan Refinancing
Funding U doesn't currently offer student loan refinancing. However, you can join the waitlist on the Funding U website to be notified of when Funding U Refinance becomes available.
Funding U Student Loan Alternatives
Funding U vs. Earnest Student Loans
Funding U student loan APRs range from 7.99% - 13.49% fixed (with AutoPay), compared with a range of 4.99% - 16.85% variable and 3.47% - 16.49% fixed (with AutoPay discount) for Earnest student loans. You can only get fixed-rate loans with Funding U, while Earnest also offers loans with a variable rate.
Funding U offers student loans ranging from $3,001 — $20,000, while Earnest's loan amount range is from $1,000 to the total cost of attendance. Neither lender charges any additional fees. Earnest allows cosigners while Funding U does not.
Funding U vs. MPower Student Loans
MPower student loan APRs range from 9.99% to 16.99% fixed (with AutoPay discount), compared with 7.99% - 13.49% fixed (with AutoPay) at Funding U. Both lenders offer only fixed-rate student loans.
MPower charges a 5% origination fee and undisclosed late fee. You won't pay any additional fees with Funding U. You can borrow from $2,001 — $100,000 lifetime from MPower, compared with $3,001 — $20,000 at Funding U.
Funding U Student Loan Customer Experience
While there aren't many online reviews of Funding U, the customer reviews we did find generally have negative things to say about the lender. A few customers on Reddit claim it took several weeks for their loans to be disbursed to their school, and they often struggle to get in touch with Funding U.
However, this does not mean that you will also have a bad experience with this lender. It's important to do your own research and get firsthand reviews from family and friends when possible.
Is Funding U Trustworthy?
Funding U received an A+ from the Better Business Bureau, which suggests it is a trustworthy company. This means the company frequently responds to customer complaints and concerns. There are no notable lawsuits pending against Funding U at this time.
Why You Should Trust Us: How We Rated Funding U Student Loans
We rate all student loan products in our reviews and guides on a 1-5 scale. The overall rating is a weighted average that takes into account seven different categories, some of which are judged more heavily than others. They are:
- Interest rate (20% of rating)
- Fees (20% of rating)
- Term lengths (15% of rating)
- Repayment options while in school (15% of rating)
- Borrower accessibility (15% of rating)
- Customer support (7.5% of rating)
- Ethics (7.5% of rating)
Each category's weighting is determined based on its importance to your borrowing experience. As you can see, Funding U fell short in certain categories, such as term lengths and interest rate, while it scored higher when it came to fees and borrower accessibility, since it's an option for those whose credit scores may be too low for other lenders.
Read more about how we rate student loans »
FAQs
What are the interest rates for Funding U student loans?
The interest rates for Funding U student loans vary based on the type of loan and the borrower's credit profile, but they tend to be higher than average. Check its website for the latest rates.
How do I apply for a Funding U student loan?
To apply for a Funding U student loan, you can complete an application online through the Funding U website. Follow the step-by-step process and submit the necessary documents.
Can I refinance my existing student loans with Funding U?
No, Funding U does not currently provide student loan refinancing options.
What repayment options are available with Funding U student loans?
Funding U offers various repayment options, including fixed and interest-only, with terms of five or 10 years.
Are there any fees associated with Funding U student loans?
Funding U does not charge origination fees or prepayment penalties. Review the loan terms for any additional charges.
** SoFi Private Undergraduate Student Loans Disclosure: Interest Rates: Eligibility and Important Details. Fixed rates range from 3.54% APR to 15.99% APR with 0.25% autopay discount. Variable rates range from 4.64% APR to 15.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates are capped at 17.95%. SoFi rate ranges are current as of 1/7/2024 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term and type of repayment option you select, evaluation of your creditworthiness, income, presence of a co-signer (if applicable) and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. Check out our eligibility criteria at https://www.sofi.com/eligibility-criteria/. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
** SoFi Private Graduate Student Loans Disclosure: Interest Rates: Eligibility and Important Details. Fixed rates range from 3.54% APR to 15.99% APR with 0.25% autopay discount. Variable rates range from 4.64% APR to 15.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates are capped at 17.95%. SoFi rate ranges are current as of 1/7/2025 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term and type of repayment option you select, evaluation of your creditworthiness, income, presence of a co-signer (if applicable) and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. Check out our eligibility criteria at https://www.sofi.com/eligibility-criteria/. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi's underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 8/5/24 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).
* The SoFi 0.25% autopay interest rate reduction requires payments by an automatic monthly deduction from a savings or checking account. This benefit is suspended during periods of non-payment through ACH, deferment and forbearance. Autopay is not required to receive a loan from SoFi.
* 0.125% Continuing Scholar Discount: Terms and conditions apply. Offer good for private student loan customers who have previously borrowed a private student loan from SoFi and are taking out a subsequent loan only, select a term and repayment type that is eligible for the discount, and is subject to lender approval. To receive the offer, you must: (1) complete a loan application with SoFi; and (2) meet SoFi's underwriting criteria. Once conditions are met and the loan has been disbursed, the interest rate shown in the Final Disclosure Statement will include an additional 0.125% rate discount because you have borrowed a private student loan from SoFi in the past. Offer good for existing private student loan borrowers only. Offer cannot be combined with other rate discounts, with the exception of the 0.25% autopay rate discount. SoFi reserves the right to change or terminate the Rate Discount Program to unenrolled participants at any time with or without notice.
