Private Student Loans: Its All About Your CreditPrivate student loans are completely unlike federal loans for college in so far as how you qualify for them. They are not based on need; they are based on credit. Your credit history has to be good and well-established or you will need to have a cosigner with a good credit rating. If your credit rating (FICO score) is less than 650, you will need a cosigner. But, if you do not have one with a better score than yours, forget about applying for private student loans. Reputable lending companies generally expect their student applicants to have a cosigner. And, watch out for advertisements like... "Student Loans, No Cosigner!"These are usually scams. In most cases, you'll be denied a loan, but they will try to sell you all kinds of services such as credit repair or credit cards.In today's loan environment, a slogan like, "bad credit college loans" targets a student who has a credit score of 630-650. If that describes you, you may be one of the lucky 5-15% of those who apply and actually gets accepted with that score. These few individuals are given the privilege of paying around a 14% rate with 12% fees. And... If you are thinking of using the strategy of applying for a lot of different private student loans hoping you'll get lucky- don't. The only sure thing that will happen is that you'll ruin what little credit you had when you started. Unlike applying for a mortgage or a car loan, a credit reporting agency will not recognize that you are "shopping around". Even if you do all the applications in a single day, each one will cost you 5 points. Okay, so assuming you have a credit score above 650...
What can you expect from Alternative Student Loans?Virtually all private student loans have variable rates. This means that whatever the actual interest rate is when you sign the note, it is likely to be different when you start paying off the loan. Typically, this variable rate is either tied to the Prime Rate or to the LIBOR (London InterBank Offered Rate).
Whatever rate is advertised ("as low as...") is the rate that is offered to borrowers (and cosigners) with the best credit- usually a 790+ FICO. This is an example of rates offered by reputable commercial lenders:
*COA-aid is the cost of attendance minus whatever aid the student receives So how do you regain some control over the process? By looking at terms other than interest rates. Many lenders offer borrower incentives with different:
Have a good idea of what type of job you will be getting after college and know that your salary will be higher after a year?- Look for a 12 month deferment before repaying. Going into a field where it takes a long time to achieve a good salary?- Try easy forbearance terms. Want to attend college part time while you are working?- Pick a loan with no full-time enrollment requirement. Does a reluctant cosigner need persuading?- Maybe they'll prefer being tied down for 48 months, rather than twenty years. Absolutely sure you can make payments?- Choose auto-pay and on-time even if the initial rate might be higher. 
You can make private student loans work for you by looking at all the terms, not just the interest rate.
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