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Funding U Student Loans: 2023 Review

Updated on Jan. 1, 2023
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At a glance

Rating: 3.2 stars out of 5
Bankrate Score
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Repayment Options
Rating: 2 stars out of 5
Rating: 3.6 stars out of 5
Customer Experience
Rating: 4 stars out of 5

About Bankrate Score

Funding U is an online lender that offers private student loans to undergraduate students without a co-signer. In fact, it doesn’t allow co-signers at all. Unlike other lenders, Funding U doesn’t base eligibility on credit history; instead, it looks at students’ GPA and other merit-based factors. While it does have higher interest rates than traditional lenders, it could be a good option for students who have strong grades but who don’t have a creditworthy friend or family member to help co-sign a private loan. However, it does cap annual loan amounts at $20,000, so it’s best for students who have covered most of their expenses with federal loans and need a small amount to fill in any gaps.

Loan amount $3,001 to $20,000
APR from 6.99% to 12.49% (with Autopay); 7.99%-12.99% (without Autopay)
Clock Wait
Term lengths 10 years

This lender is best for undergraduate students with little to no borrowing history who do not have a co-signer.

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Funding U features

Funding U has limited lending options, offering only one private student loan for undergraduate students. However, its unique eligibility criteria makes up for the limited offerings.

Rather than relying on credit score and income to make lending decisions, Funding U uses its own proprietary scoring system based on academic progress and success. The lender tailors its product to undergraduates even further with its blog, which covers everything you need to know about building credit, paying for college, job hunting and more.

Funding U: in the details

Pros and cons of Funding U student loans

Funding U’s unique lending process comes with benefits, but it also has its drawbacks. Here’s what you need to know about the lender before applying.


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    Discount for interest-only payments in school: Borrowers can choose to make either $20 flat payments or interest-only payments while in school. If you choose to make interest payments, you’ll get a rate reduction of 0.5 percent.

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    No fees: Some lenders tack on an origination fee each time you take out a loan. Funding U does away with all fees, including origination fees and application fees.

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    Availability: Funding U loans are available in only 38 U.S. states. While the list of eligible states is growing, residents outside of these states currently cannot borrow with the company.


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    Limited repayment options: Unlike with most lenders, you are required to make payments while you’re in school, though you can choose between a flat $20 payment and interest-only payments. Once you graduate, you are also limited to one repayment term of 10 years.

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    Availability: Funding U loans are available in only 37 U.S. states. While the list of eligible states is growing, residents outside of these states currently cannot borrow with the company.

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    Low maximum loan amount: The maximum amount of $20,000 per year is low when compared with other lenders, some of which offer up to the full cost of attendance.

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    High interest rates: Young borrowers without a co-signer will almost always be subject to high interest rates, and Funding U is no exception. Its interest rates are high, especially compared to interest rates offered by the federal government or more traditional private lenders.

Funding U student loan requirements

In order to quality for a Funding U student loan, you must:

  • Be a U.S. citizen, permanent resident or DACA recipient.
  • Be at least 18 years of age.
  • Be an undergraduate student enrolled in a bachelor’s degree program at a Title IV-eligible four-year college.
  • Be enrolled full time.
  • Be enrolled in an approved program or field of study.
  • Be a resident of a qualifying state.

When making lending decisions, Funding U says that it considers students’ academic success in college, likelihood of graduating on schedule and projected total student debt. And while there is no minimum credit score requirement, Funding U will review applicants’ credit histories to ensure that there’s no pattern of late payments, collections or other indications of an adverse credit history.

Who is this loan good for?

Funding U is a great option for undergraduate students with little to no borrowing history who do not have a co-signer. Academic high achievers are most likely to be approved for a loan with Funding U. Funding U could also be a good choice for borrowers who don’t need to borrow much in student loans, since it caps its loans at $20,000 annually.

Interest rates and terms

Funding U offers undergraduate student loans with fixed interest rates — there’s no option to select a lower variable rate. Keep in mind that the specific terms and conditions of your student loan will vary based on your graduation year and state.

Loan product

Variable rate

Fixed rate

Undergraduate student loans


6.99% to 12.49% APR (with Autopay) 

7.99% to 12.99% APR (without Autopay)

Fees and penalties

There are no application fees, origination fees or cancellation fees associated with a Funding U student loan. You also won’t be charged a pre-payment penalty should you decide to pay the loan off early.

Repayment terms and grace period

Borrowers have a few payment options while they’re still in school:

  • Interest-only payments every month.
  • $20 minimum payments every month.

The in-school period can last up to 51 months, at which point loans enter a six-month grace period. Loans will also enter the grace period if you drop below full-time enrollment.

After the six-month grace period, students will begin repayment. There is only one repayment term offered; students must repay their loans over a period of 10 years.

Customer service

Funding U’s customer service department is run through Scratch Services. If you have a question about your loan or the application process, you can contact a customer service representative through a phone call, the chat feature on the Scratch website or a letter.

You can call Scratch at 844-727-2684 from 9 a.m. to 8 p.m. ET Monday through Thursday or 9 a.m. to 5 p.m. ET on Friday. You can also log into your account at and use the live chat feature.

If you’re sending correspondence, you can send it to P.O. Box 411285, San Francisco, California, 94141. If you’re mailing a check, you can do so through USPS by sending it to Scratch Services, LLC, PO Box 398654, San Francisco, California, 94139.

How to apply for a loan with Funding U

You can apply for a student loan directly on Funding U’s website, starting with a preapproval process that’s based on factors like academic achievement, courseload, projected graduation date and future earnings.

In order to speed up the application process, you will need to have these documents on hand:

  • State-issued ID.
  • Most recent full transcript.
  • Financial aid award letter.
  • Tuition bill.

Here’s what the process will look like after getting preapproved:

  1. You’ll be assigned a dedicated loan officer who will assist you with details like your loan offer, repayment options, interest rate and terms.
  2. You’ll then submit the documents listed above to finalize the loan offer.
  3. If needed by your school’s financial aid office, you can request your preapproval letter from Funding U.
  4. Once the semester starts, your loans will be disbursed to your school.

Applications for the upcoming school year typically open in June.

How Bankrate rates Funding U

Overall Score 3.2
Repayment Options 2.0 Funding U’s loan options are extremely limited, with a low maximum loan amount and only one repayment term.
Affordability 3.6 Funding U’s interest rates are high, though it does accept borrowers without co-signers.
Customer Experience 4.0 Funding U falls short for its slightly limited customer service hours, but it has a solid online platform and an autopay option.

Editorial disclosure: All reviews are prepared by staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.