An interest rate is a percentage of your loan value that's added onto your total monthly repayments — this is the cost that comes with borrowing money.

The total amount of interest you owe is determined by the amount of time you take to pay off the loan and your interest rate.

Since more interest is owed with each payment, having fewer payments by repaying your loan sooner can lead to big savings.

Additionally, getting a low interest rate means that you will owe less interest with each monthly repayment, helping you save money over the life of the loan and pay off your debt faster.

Most private student loans will offer you the choice between a fixed- or variable-rate loan. The difference between them is:

• A fixed-rate loan has an interest rate that remains the same over the entirety of the loan. This means that your monthly payments won’t change either, leading to predictable payments.

• A variable-rate loan has an interest rate that can go up or down with the market. As a result, your monthly payments could increase, but they also have the potential to decrease.

Historically, over 90% of private student loans taken out by undergraduate students are borrowed with a cosigner — a creditworthy individual who agrees to repay the debt if you, as the primary borrower, fall behind. The reason behind this is that students usually haven’t had the time to build up their credit yet to meet lenders’ loan approval requirements.

Even if the lender doesn’t require a cosigner or you don’t need one, applying with a cosigner could improve your chances of qualifying for a private student loan at a lower rate.

You can still get a private student loan with bad credit, but maybe not on your own. If you have bad credit or no credit at all, you will most likely need to add a cosigner to qualify.

Even if you can get approved for a loan by yourself, your interest rate will likely be high if your credit score is low. One potential way to avoid this and get approved for a student loan with a lower interest rate can be to apply with a creditworthy cosigner.

While most lenders allow you to borrow up to the total cost of attendance for your school, how much you can actually borrow may vary based on the lender, your major, your credit score, and whether or not you have a cosigner.

A school's total “cost of attendance” is defined by your school and usually includes costs like: tuition and fees, room and board, transportation, school supplies, and any other education-related expenses.

Just because you might be able to borrow 100% of school-related expenses with a private student loan doesn’t mean you should. It’s always a good idea to explore other funding options like federal student loans first before turning to private student loans to cover whatever’s leftover.

Generally, the private student loan money is first sent to your school and applied directly towards any tuition and fees you owe. After that, any unused student loan money is usually sent to you through a check or an online deposit.

The exact details of how this process works can vary depending on your particular school and lender, so it’s a good idea to read up on the details or ask ahead of time. For example, your school’s financial aid office can have its own way of redirecting leftover student loan funds. Your lender could also potentially divide the total loan money it gives out across each semester or academic year or simply give out the money all at once.

Each lender has their own requirements for taking out a loan. With that being said, lenders will usually require that you:

• Plan to use the loan for education-related expenses

• Have a qualifying credit score

• Have a qualifying income and debt-to-income ratio (DTI)

• Be enrolled in an eligible school

• Be a U.S. citizen or legal resident with a Social Security number

If you don’t meet the minimum approval requirements, you'll want to apply with a creditworthy cosigner who does in order to qualify. A cosigner is someone who applies with you and agrees to take responsibility for paying back your loan if you don’t. A cosigner is usually the student's parent or guardian, but any creditworthy individual can fulfill the role. Even if a cosigner isn’t required by the lender, applying with one can increase your chances of approval and help you get a better rate.

Student loans can seem stressful and confusing, but just know that you don’t have to tackle it alone. Fortunately, there are many ways to get help without paying for it. You can:

• Speak with your high school guidance counselor

• Make use of on-campus college resources, such as your financial aid office

• Reach out to a federal student loan representative at StudentAid.gov about getting started and application assistance

• Contact private student loan companies about their products and services

Also, consult free online resources like TuitionHero, where you can get all your questions answered with simple and in-depth guides and articles. For now, these guides might be most useful to you:

• What are Private Student Loans

• The Ultimate Guide to Student Loans