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.
How FundingU is Different From Other Lenders
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.
Interest Rates, Loan Amounts, Fees, & Repayment
Funding University offers fixed interest rates on all of its loans which are only offered to undergraduate students. All approved students will receive a loan with a fixed interest rate of 11.49% with autopay or 11.99% without autopay. In addition, FundingU offers loans ranging from $3,001 to $10,000 per school year.
There are no origination fees with any FundingU loans. This means a percentage of your loan will not be taken out from the start. In addition, there are no prepayment penalties on FundingU's student loans which means you can pay off your loan early without paying a fee.
All FundingU loans have a repayment period of 10 years starting 6 months after graduation or leaving school. While in school, borrowers will be required to make interest-only payments. Though this may seem like a nuisance, it can actually help borrowers save a considerable amount of money versus if they made no payments while in school.
FundingU Student Loan Eligibility Requirements
Eligibility for FundingU's 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. Some of these factors include class hours completed, graduation date, major, academic record, internship/employment experience, and more.
Currently, Funding University only offers loans to residents of the following states: Arkansas, Colorado, Connecticut, Florida, Georgia, Hawaii,Kansas, Massachusetts, Nebraska, New Jersey, New Mexico, New York, North Carolina, Oregon, South Carolina, Vermont,Virginia, West Virginia, and Wisconsin.
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.
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 or who doesn't have one. However, the interest rates on these loans are substantially higher than the rates typically offered for private student loans with cosigners.
If you cannot get a cosigner for your private student loan, a Funding University private student loan may be a good choice for you.
Check here to compare FundingU to the other best private student loans.