Private student loans – also known as alternative loans – are offered by private lenders to provide funds to pay for educational expenses. They are not part of the federal student loan program and generally do not feature the flexible repayment terms or the borrower protections offered by federal student loans.

While current federal loans have a fixed interest rate, private student loans typically have variable interest rates, meaning that your interest rate may change over time. The interest rates and fees you pay on a private student loan are based on your credit score and the credit score of your co-signer, if you choose to have one.

You may want to apply for a private student loan with a co-signer even if you could qualify for the loan on your own. In evaluating a loan application, lenders will look at your co-signer’s credit history. So, if your co-signer has a better credit score than you do, it could result in a lower interest rate and lower fees for your loan.