Funding U Private Student Loan Review

Funding U Private Student Loan Review

Funding U Private Student Loan Review
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About Funding U

Funding U was founded in May of 2015 by Jeannie Tarkington. While the company is based in Atlanta, Georgia, it serves students in 35 states. Funding U lends to DACA recipients, permanent residents, and U.S. citizens.

Only students who attend one of approximately 1,450 eligible higher learning institutions in the United States are eligible, and Funding U does not lend to students who are attending international schools.

Funding U is unique because it offers merit-based student loans for career-focused college students. The lender relies on its SMaRT (Student Merit and Risk Test) scoring system.

The SMaRT system leverages non-credit-related information in order to determine loan worthiness. This system is intended to predict the probability that an undergrad student will default on their student loan.

Funding U provides funds directly to approved applicants and services loans via a partnership with Scratch. Students typically find the Scratch loan management interface to be seamless and user-friendly.

Students who have issues with either the loan application process or their Scratch account can request direct assistance by emailing Funding U at

What Students Love About Funding U

By far, the biggest appeal of Funding U is that they make lending decisions based on “non-credit variables.” This makes Funding U one of the more accessible lending options for most students, particularly sophomores.

College attendees often have little or no credit history, which means that obtaining a traditional student loan will be challenging, especially if they do not have a solid co-signer.

Funding U eliminates this major barrier to higher education by breaking away from FICO-based lending. Instead, they rely on the SMaRT scoring system outlined above. The SMaRT system takes into account factors such as:

  • The applicant’s collegiate academic success
  • The applicant’s chances of graduating on schedule
  • The applicant’s projected total student loan debt

In addition to using the SMaRT system, Funding U’s seamless application process makes them a favorite among some students. The application is easy to complete, and Funding U will respond to funding requests promptly.

Shortcomings of Funding U

Funding U has two downsides that will prevent some students from taking advantage of their user-friendly loan process. First, Funding U does not lend to freshmen. This is because they base their lending decisions on non-credit-based criteria, such as collegiate academic performance.

Second, Funding U only lends to students at not-for-profit learning institutions. In total, they lend to students at approximately 1,450 colleges across 35 states. Borrowers must be permanent residents of eligible states in order to qualify. Students who are not residents of those states are not eligible for Funding U loans.

Also, Funding U only offers loans to students enrolled in undergraduate programs. They do not offer funding for graduate students at this time.

What Types of Loans Does Funding U Offer?

Funding U only offers a single type of loan. They provide eligible students with fixed interest rate loans that do not require a cosigner.

Loan amounts range from $3,001 to $15,000 per school year. Half of the loan amount is disbursed at the start of the fall semester, and the second half is disbursed when the spring semester begins. Loans are not currently available during the summer semester.

Loan rates are between 7.49% and 12.99%. However, seniors who have performed exceptionally throughout their college careers may be eligible for a discounted rate. Unlike some government-backed funds, Funding U’s private loans begin accruing interest while students are still attending school.

In order to determine loan eligibility, Funding U examines the following information via their SMaRT scoring system:

  • School graduation rate
  • Class hours completed
  • Estimated graduation date
  • Academic record
  • Major employment or internship experience
  • Academic/non-academic activities that demonstrate borrower’s work ethic

Funding U is one of few lenders that does not require a co-signer and does not rely on credit scores to determine eligibility.

How Does It Work?

The Funding U lending process is divided into four easy steps, which are as follows:

Step 1

First, students can check their eligibility by inputting some basic information into the Funding U database. This includes the college they are attending and the degree path they have chosen.

During step 1, students must also provide Funding U with a copy of their academic progress plan. This will demonstrate if the student is on pace to graduate as scheduled, how they performed during their previous years of college, and whether they have engaged in any other activities, such as an internship.

Funding U will utilize this information to analyze eligibility via their SMaRT scoring system.

Step 2

After the information is submitted, Funding U will review the application. They make pre-approval decisions based on academic achievement, course load, the student’s projected future earnings, and whether they are expected to graduate on time. Funding U never requires a co-signer, which is part of why their approval process is so efficient.

Step 3

If pre-approved, students are assigned to a loan officer. The loan officer will contact them directly to discuss academic plans, repayment options, and their offer.

Step 4

If a student accepts the loan terms, they must finalize the offer by submitting their tuition bill, a photo of their ID, and their transcripts to Funding U. The lender will disburse the funds when the semester begins.

Credit Score

Since Funding U relies on their SMaRT scoring system, students with a low credit score or no credit history whatsoever may be eligible for funding.

Funding U is much more concerned with students’ risk of default, academic performance, and whether they are on pace to graduate as projected. These data points have a strong correlation with loan repayment rates.


Funding U is not currently rated by the Better Business Bureau. While the company was founded in 2015, they are still a bit smaller than many other lenders. They also do not serve students in all 50 states. As a result, they have not received much in the way of media attention.

On the other hand, Funding U has not made the news for anything negative, either. They are also a popular option among students because:

  • They don’t require a cosigner
  • Lending decisions are not based on credit
  • The approval process is lightning fast
  • Funding U offers flexible repayment and forbearance options

These factors make Funding U a good choice for many students. For those who are still on the fence, it never hurts to ask around or do a little extra research on student loan review forums to see what others are saying about this lender.


All Funding U loans have a 120-month repayment term. This term begins six months after students graduate. While no payments are due while the student is attending school, they may voluntarily make fixed monthly payments of $20 while enrolled. They may also make interest-only payments to receive a 0.5% interest rate discount.

Funding U does not charge any prepayment penalties on their loans. They do offer forbearance options for some loan recipients. The maximum forbearance period is generally 24 months.

Making interest-only payments while enrolled in school can help students prevent the principal amount of their loan from increasing. This will lead to a lower monthly payment after the post-graduation deferral period. Over the life of the loan, taking this approach can save students several thousand dollars in accrued interest.


Funding U provides students with a six-month grace period after they graduate. This time is meant to allow graduates to settle in their new jobs before taking on their loan payments. In addition, Funding U offers forbearance periods of 24 months or more.

However, students can opt in for the $20 monthly flat-rate payment or interest-only payments while attending college. While $20 will not do much to mitigate the interest accrued on the loan, it will help students get in the habit of making their regular monthly loan payments.

If students have the extra cash available, they should strongly consider making interest payments while enrolled so that they can minimize the total debt that they accrue.


Funding U will inform students of their loan rate once they are pre-approved for funds. In addition, Funding U is transparent about the range of their loan rates so that students can have some insights into what their monthly payments will be. All loans are repaid via the Scratch loan management platform.

Final Take on Funding U

Attending college can be an expensive but necessary endeavor for career-minded people who want to land their dream job in a field they are passionate about. With that being said, it is vital that college students conduct thorough research before choosing a lender or loan format.

Funding U is a good option for some students because the lender does not require a co-signer, does not base lending decisions solely on creditworthiness, and does not charge any application or origination fees. In addition, Funding U loans offer lower interest rates to seniors who have exhibited “outstanding academic performance.”

However, Funding U offers relatively low maximum funding amounts, which means that many students need to pursue supplemental funds or attend a more affordable institution.

All in all, Funding U has a positive reputation within the student community and has transparent loan conditions and a simple application process. This makes it a good lending partner for a broad range of students.