The most important financial aid for students who are not able to deal with their education related expenses but wish for superior studies is the various types of student loans. The two typical categories of student loans are: federal student loans and private student loans. The most easily to obtain are the federal student loans and they are provided by the federal government through the Federal Student Aid programs of United States of America's department of education. The private student loans are offered by ordinary financial institutions such as private banks or credit unions. The both sorts of student loans can be used for funding higher education. But the students who have several loans can choose the way of a student loan debt consolidation in order to combine the loans into a single one and, for that reason, to reduce the monthly payments. When considering a student loan debt consolidation it is better not to mix up together the federal loans with the private ones.
It is recommended to consolidate first the federal student loans. There are many advantages of student loan debt consolidation of the federal loans. First of all, by consolidating the each month repayments to a single check payment the rate of interest will be smaller. In the same time, the monthly payments will be reduced since the period of loan repayment is increased to 30 years, depending on the loan schedule. The students who want to be eligible for a student loan debt consolidation of their federal loans have to accomplish some conditions such as: they are not enrolled in school to any further extent; they are actively repaying the loan or are in the grace period of six months after graduation, they have a minimum loan sum of $10,000.
The most important reason for which is not advisable to combine federal loans with private loans into a student loan debt consolidation is that the interest on federal loans is tax deductible. The students are able to suspend payments when they return to college and furthermore the loan is forgiven for certain services. If the students mix up the two types of loans into student loan debt consolidation they will loose all the advantages of the federal loans.