Student loans are complicated. What makes matters worse is that they are referred to by so many different names – student loans, college student loans, private student loans. It is hard to keep track of which terms refer to which types of loans.

Private student loans can refer to private or alternative student loans. Private student loans are frequently variable rate loans, which allow students to borrow up to the full cost of education.

The private student loans do not generally have application deadlines, so students can apply whenever they need additional funds to cover education expenses. Some private personal student loans are disbursed to the school, but others may be sent directly to the borrower – and a borrower can get their check in about a week.

You can usually apply online for a private or alternative student loan or apply over the phone or in person. It can take as little as 15 minutes to apply, and applying with a creditworthy co-signer greatly improves your chances of being approved for a personal student loan. If you cannot finish your loan application during the session, you can usually save your loan application and finish applying when you are ready.

If you have a credit worthy co-signer, like both parents, grandparents, and other close relatives, you will start out ahead of the game. (Note: If your family’s income depends on the salaries of both parents, both parents should be encouraged to co-sign your private student loan.)

• You may qualify for a private student loan you would not have been able to get based on your credit history
• You can often qualify for larger private student loans based on your co-signer’s financial history
• You may qualify for lower interest rates, and that means lower payments and a lower total cost for your private student loan
• You can build up your own credit history

Having Two Co-Signers is Even Better

Multiple co-signers can only work to your advantage since your private student loan terms will usually be based on the co-signer with the best history of credit and income.

When there is more than one co-signer on your private student loan, your student loan terms will usually be determined based on the co-signer with the best history of credit and income. So multiple co-signers can only work to your advantage.

Co-signing poses no risk to your co-signers unless you default on your private student loan. In addition, co-signers, subject to certain conditions, can be released from their obligation after 48 consecutive on-time payments. This is going to enhance your credit history, as the payments being made after that point will only be reported to your credit report.

If there is an important student in your life, one of the greatest ways you can help that student achieve the many advantages of higher education is to be a co-signer on his or her private student loan.

Here is why you should consider being a co-signer:

• As a credit worthy co-signer you can help that student qualify for the loan in the first place
• Your signature can help the student qualify for a larger loan amount
• You’ll help the student borrow at a lower interest rate — decreasing his or her costs down the road
• When the student gets a loan and makes the payments on time, he or she will begin to establish a credit history
• By taking on and handling this obligation, the student will develop good financial habits early in life — for the rest of his or her life

Moreover, this is not a life-long commitment for you. As a co-signer, you can be released from the obligation after 48 consecutive on-time payments, subject to certain conditions.