Oftentimes, a customized payment plan is the best option for those looking to bring the overwhelming gravity of student loans down to a combined and simplified process. The difficulty of grappling with Ohio student loans can be eased with consolidations, which can eventually lead to debt relief.
Federal Student Aid defines loan consolidation as a type of loan that allows the applicant to unify multiple federal education loans into one loan at no cost to the student. A consolidated loan, unlike other types of loans, has one fixed interest rate based on the average of the interest rates on the loans being consolidated. This type of plan requires one monthly payment instead of multiple payments. Most federal student loans qualify for consolidation. Some of the types of eligible loans are listed below:
- Subsidized and unsubsidized Federal Stafford Loans
- Nursing Student Loans
- Health Education Assistance Loans
- Loans for Disadvantaged Students
- Supplemental Loans for Students
Other types of loans are eligible for consolidation, as well, and are listed on the Federal Student Aid website. There are other details and requirements included in the consolidation guidelines.
Choosing to consolidate loans can come with a number of advantages and disadvantages depending on the individual’s plan, as a major drawback to this option is the raising of interest rates. According to U.S. News, direct student loan consolidation adds around 0.125 percent in interest. First and foremost, consolidating a loan should enable one to stay on top of loan payments. There are various factors that play into qualifying for a consolidated loan, including level of income. Yet on a more optimistic note, consolidating loans can improve options with older federal loans.