Before choosing a private student loan, first determine whether you have exhausted appropriate federal student-aid options and other available funding sources. Private loans can help fill a funding gap, but their terms and borrower protections can vary significantly between lenders.
Compare the APR, interest rate, fees, repayment term, cosigner requirements, and total repayment cost rather than choosing based only on the monthly payment. Also find out whether the interest rate is fixed or variable and whether payments are required while you’re still in school.
If you need a cosigner, understand that the person may share responsibility for the debt if you cannot repay it. Also check whether the lender offers options such as cosigner release after meeting certain requirements.
Finally, don’t borrow more than you need simply because a lender approves a larger amount. Estimate your future payments before accepting the loan and understand exactly what you’re agreeing to. Our guide to federal vs. private student loans can help you compare the two options.
