After maximizing all free money and fully exploring federal loans, private student loans are another way to cover college costs. As with any loan, be conservative and only borrow what you absolutely need and can afford to repay. Ask your financial aid advisor about the private student loans that are available to you.
The process for qualifying for private loans is different from the one for federal student loans. Each lender sets its own credit criteria. Those criteria may, in turn, vary by loan type and whether or not you apply with a creditworthy cosigner.
Credit Scoring
Credit scoring is a way some lenders determine if applicants will qualify for their loans and also what interest rate to offer. If your credit score is in an acceptable range, you can probably qualify for the loan.
Cosigners (or co-borrowers or endorsers)
In some instances you may need to apply with a creditworthy cosigner, especially if you have not established a credit history. Not only will a cosigner help you qualify, but you may also get a lower interest rate when applying with a cosigner. In many cases, a creditworthy cosigner can help you get a lower interest rate and more favorable terms.
By cosigning the loan, your cosigner agrees to be equally responsible for repayment of the loan along with the primary borrower (you). Cosigning a loan is an important responsibility. Make sure you and your cosigner understand all the ins and outs.
