Should you have no credit history or a poor credit history then finding a student loan may not be so easy. If however you can find a suitable person to agree to be a cosigner and to guarantee your loan repayment then this will certainly help you to secure a loan.

Most students generally have few if any credit cards, no not have car loans and seldom have a home mortgage loan so that they simply have little or no credit history against which to judge the risks in granted them a loan. Additionally, in those cases where students have a credit history it is frequently less than favorable because, like many of us when we are young, they have made some unwise decisions and overreached themselves so that they ran into problems making their repayment obligations.

Either way the absence of any credit history or a record of late repayments and perhaps even defaulting on loans will often place a student in a high risk category so far as a lot of lenders are concerned. As a result loan officers, including those responsible for taking decision on behalf of the Federal student loans programs, will usually approach applications from students in this situation with caution. In many cases applications will be turned down or, in borderline instances, loans may be granted but a higher interest rate will be applied to offset the risk and to compensate for higher default rates.

One method of counteracting the absence of any credit history or a bad credit score is for students to use a cosigner for their application for a loan. In the majority of cases this will be one of the student's parents and loan officers will look then at the parent's credit history when deciding whether to grant a loan.

At the same time it is the parent's credit history which becomes the chief factor in determining the interest rate to be charged and parents with a good credit history will typically receive the best rates, while parents with lower credit scores will generally pay a higher rate. This difference may seem to be small at first glance but can in reality amount to a considerable sum over the normal 10 year repayment period.

For instance, one popular cosigner program grants loans at an interest rate of 4% for borrowers with an excellent credit history rising to 6% for those with a poorer but still acceptable record. This difference of 2% may not appear to be much but could represent in excess of $5,000 over the life of a loan.

It is not uncommon these days for students to require as much as $100,000 to finance an undergraduate education and, even if interest is paid from the outset and is not rolled up, interest at the current Stafford loan rate of 6.8% is close to $567 per month or $6,600 per year. Reducing that interest rate to 5%, which is the present rate for a Perkins loan, reduces these figures to $417 and $4,820.

It also has to be remembered that these figures assume that repayment starts straight away. However, it is far more common for repayment to be deferred until six months after leaving college which is going to increase these figures considerably.

Borrowers who use a cosigner with a good credit record will not only improve their chances of obtaining a loan in the first place, but will also lower their total loan repayment very considerably.

TheStudentLoansCenter.com provides information on a range of topics including a bad credit student loan with co signer and an alternative student loan for bad credit