Private student loans are offered by private lenders under their own criteria. Pricing and terms can depend on the borrower and any co-signer. A private offer should be evaluated separately from the federal aid available.

How the borrowing arrangement works

Read whether the quoted rate is fixed or variable and whether approval requires a co-signer. Ask when payments start and whether the loan covers the planned school and program. Clarify any conditions attached to a preliminary rate quote.

Costs and repayment

Compare total expected repayment, fees and the handling of interest during study. Look for the written provisions for hardship, disability, death and co-signer release rather than assuming federal rules apply. Check all release requirements if another person is signing.

Preparing to compare offers

• Prepare the school-year budget, other aid and the amount still needed.
• Ask whether a co-signer is required and which income and credit information both applicants must provide.
• Confirm school certification, disbursement timing and conditions before relying on funds for a deadline.

Questions worth asking

• Does this lender cover my school and program?
• When do payments and interest begin?
• What are the co-signer and hardship terms?

A co-signer is responsible for repayment

A co-signer is not just a character reference. Both people should receive account information and agree on a plan for missed payments. Release is subject to the lender's criteria and should not be assumed after a certain number of payments.

Does a private loan have federal repayment options?

Do not assume so. Private repayment provisions come from the lender and contract.

Is a co-signer automatically released later?

No. Release, if offered, normally has specific requirements. Read them before signing.

BorrowCompass provides a guide to this topic at private student loan payment vs total cost. Review current provider terms before making a borrowing decision. BorrowCompass does not issue loans or guarantee approval.