With the cost of a typical college education continuing to increase across the United States, it’s unsurprising that many students find themselves unable to cover the full cost of their tuition and fees. That is where companies like Funding University have stepped up to fill the gap, offering private student loans to qualified students.

Founded in Georgia in 2015, Funding University is a private student loan company that offers private student loans to borrowers who meet certain criteria. These loans are offered without cosigners to students who have demonstrated they are not a credit risk and are more likely to land a good job after graduation. These loans may be particularly attractive to any student who either does not have someone to cosign their private student loans, or does not want to ask a family member or friend to cosign their loans.

Private Student Loans without a Cosigner

Private student loans are generally made available based on the creditworthiness of the borrower. As a general rule, private student loans require students under the age of 25 or those without a strong credit score to have a cosigner. A cosigner is a person who agrees to take on the student loan debt if the primary borrower fails to pay it. Typically, a parent, grandparent, other family member, or friend will cosign a student loan on behalf of a borrower.

There are many reasons why a borrower may want to avoid having a cosigner on a student loan. Being a cosigner on a student loan can put the cosigner’s own financial health in jeopardy, as your own credit score will now reflect the student loan debt as a liability. If the borrower misses a payment or makes a late payment, it will impact the cosigner’s credit score. And if something happens so that the borrower cannot pay the debt, the cosigner will be required to pay back the full amount.

Funding University allows borrowers to avoid the difficulties associated with getting a cosigner by allowing qualified students to obtain private loans in their own names. If a student has demonstrated that he or she is serious about their education and has made an effort to gain work or practical experience before graduation, they will likely be approved as a good credit risk.

How to Qualify

Funding University allows borrowers to take out loans from $3,001 to $10,000 per semester at fixed interest rates. Eligibility for loans is based on a number of factors that seek to determine the likelihood you will be able to pay back your loans after graduation — rather than your current credit score or income.

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The first step in applying for a loan from Funding University is getting pre-qualified. This requires you to fill out some preliminary information about the number of class hours you have completed, your expected graduation date, your major, your work or internship experience, your academic record, and any extracurricular activities. If you are pre-qualified, you will then be asked to fill out an application. The Funding University application process requires you to fill it out by using four items: your academic transcript, your financial aid award letter, your résumé, and your credit report. Once you are approved for a loan, you will be required to have a 10 minute phone consultation with a Funding University loan adviser prior to the loan closing to ensure you understand the loan terms and interest rates. This includes the requirement that you update Funding University each semester on your academic progress, employment status, and career prospects.

Regardless of the loan amount, you will be required to pay $40 per month while you are enrolled in school to help you establish good monthly payment habits. After graduation, you will have a 1-month grace period before you will have to make your first student loan payment.

Limited Availability

Currently, Funding University only offers loans in 11 states, including Alabama, Arizona, Arkansas, Florida, Georgia, Massachusetts, Nebraska, New Jersey, New Mexico, New York, North Carolina, and Wisconsin. The company plans to expand to an additional 24 states in 2018 and beyond.

Fixed Interest Rates for Undergraduate Student Loans

Funding University offers fixed interest rates on all of its loans which are only offered to undergraduate students. For the 2016-2017 school year, new undergraduate student loans will have a fixed annual percentage rate (APR) of 15.99%. All loans have a one-time origination fee of 4.99% and a fixed 10-year repayment term.

Is a Funding University Loan Right for You?

Funding University loans offer private student loans without cosigners, which can be highly beneficial to anyone who wants to avoid having a cosigner. However, the interest rates on these loans are substantially higher than the rates typically offered for private student loans with cosigners, and they include origination fees. This could substantially increase the overall cost of your loan. If you cannot get a cosigner for your private student loan, a Funding University private student loan may be a good choice for you.