Funding your college education is relatively simple at first. You complete the Free Application for Federal Student Aid (FAFSA), choose a type of federal student loan and apply it to your tuition. But for many degree paths, this isn’t enough.
So what can a student loan borrower do after maxing out their federal student loan limit? Let’s examine some of the most common options, and take a look at what sets Funding U apart from other private student loan companies.
How Funding U Works
When students max out federal loans, they often turn to Parent PLUS loans, a type of federal loan that parents can use to pay for a child’s college education. Other borrowers will take out private student loans that require an adult to cosign.
For students whose parents aren’t willing to take out a Parent PLUS and are not capable of cosigning a private loan, finding money for college can seem impossible. That’s why Funding U was created. Unlike other private student loan companies, Funding U lets you take out private student loans without a cosigner.
Funding U is designed to be a complementary solution for educational financing. Before turning to private student lenders like Funding U, students should max out their federal and state financial aid, including student loans, work-study, grants and more.
But if you’ve reached those limits, have applied to dozens of scholarships and still need more money, that’s where Funding U can help.
How to Qualify for a Funding U Loan
Most private lenders use your credit score and income to determine eligibility. But if you’re a student, you likely have little or no income and credit history. Instead of relying on those factors, Funding U uses your academic history, including your GPA and current major, to determine if you’re eligible for a student loan. Students need to have a minimum 2.5 GPA to be approved.
Funding U will still run a credit check on borrowers to spot any red flags like a history of missed payments, defaults or bankruptcy. But if you don’t have any credit history at all, Funding U won’t count it against you.
Rates and terms
Funding U offers loans with a 10-year term, with fixed interest rates ranging from 6.99% APR to 12.4% APR. These rates are similar to other private lenders. The annual loan amount ranges from $3,001 to $20,000, with a total loan limit of $100,000. Loan amounts are disbursed evenly throughout both semesters.
Students must be at least 18 years and enrolled at an accredited university pursuing an undergraduate degree. You must be a full-time student to qualify; part-time students are not eligible. DACA recipients are eligible for Funding U loans.
All undergraduate grade levels, including freshmen, can apply for a Funding U loan. Graduate and professional students are currently not eligible.
Like other private lenders, Funding U does not charge any application, origination, prepayment or cancellation fees.
Availability
Unfortunately, Funding U is currently not available in every state. Here are the states where Funding U operates:
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Florida
- Georgia
- Hawaii
- Illinois
- Indiana
- Iowa
- Kansas
- Maryland
- Massachusetts
- Michigan
- Missouri
- Nebraska
- New Jersey
- New Mexico
- New York
- North Carolina
- Ohio, Oregon
- Pennsylvania
- South Carolina
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
Borrowers can build credit history with Funding U
Funding U requires that borrowers make $20 payments every month while in school and during the six-month grace period after graduation.
Funding U will report these payments to the three major credit bureaus, which will help students build a solid credit history. If you make these payments on time, you may graduate with an excellent credit score without even trying.
How Funding U Compares to Private Lenders
No cosigner required
The biggest difference between Funding U and other private student loan companies is that Funding U does not require a cosigner. A cosigner is an adult with current, steady employment and a good credit score who agrees to take on legal responsibility for your loans if you default.
Private lenders usually require a cosigner because the student has no or little income and credit history. The cosigner often needs to have a credit score of 670 or higher. Lenders may also have minimum income requirements for cosigners, but the exact amounts vary. Cosigners also need to meet other requirements, like being US citizens or permanent residents.
Roughly five million students have parents who do not qualify as a cosigner because of problems with their income or credit history. Funding U recognizes that students whose parents can’t cosign will find it harder to finance their degree and believes that those students still deserve a quality education.
Higher automatic payment discount
Funding U offers a .50% interest rate discount when you sign up for automatic payments, while most private lenders only provide a .25% interest rate autopay discount.
Customer service
Funding U knows that student loans can be confusing for borrowers. That’s why they provide a dedicated loan officer to walk each student through the loan process. They will also be available throughout the year to answer questions.
Grace period
Funding U provides a six-month grace period after graduation, during which time you only have to continue making the $20 monthly payments. After the grace period is over, students will have to start making full interest and principal payments on their loans. The six-month grace period is similar to other private lenders and federal loans.
Forbearance period
Funding U offers a forbearance program for borrowers who are having trouble making payments. The exact length of the program depends on your particular circumstances, but usually lasts around three months.
Disclaimers
