Sitting for the bar exam can be an expensive undertaking for law students.
Depending on which state you are in, the test itself could cost up to $1,000 or more. And that’s not counting the hotel you may need to book overnight between test dates, or a bar review course you may sign-up for.
That’s why there are bar loans available for law students who need financial help to pass the bar. Here’s what you need to know about bar loans and how to qualify for one.
What are bar loans?
Many law schools encourage their students not to work while they are studying to pass the bar. Yet, this may be financially impossible for many students unless they are able to get a bar study loan.
Some students may be able to borrow additional funds through federal student loans if they haven’t maxed out their federal student aid eligibility. However, bar loans can help law grads with no additional federal funds available to pay for all of their bar-related costs.
Keep in mind though that all bar exam loans are private loans. You are not required to demonstrate financial need in order to qualify for a bar loan. Yet, it is in your best interest to borrow as little as possible.
Bar study loan aspects
Since bar loans are private loans, their interest rates and fees may be higher than what you might get from a federal student loan. And, bar loans can’t be consolidated with federal student loans.
Also, a bar study loan will often have an aggregate debt limit for borrowers. So if you have a large amount of student loans or other consumer debts, you may not qualify for the loan.
You can apply for a bar study loan on your own. Or, with the help of a co-signer.
If you are denied a bar loan because of bad credit, you can either appeal the decision with the lender or apply with another lender. However, bar study loans have deadlines for application, so it’s important to apply early if you are at all concerned that you might be denied.
Bar loans are not exactly mainstream loan products, so you might not know where to get one.
Here are four lenders who offer these loans, and the terms you can expect from each one.
You can borrow as little as $1,000 or as much as $15,000 with the Bar Study Loan from Sallie Mae.
Interest rates are variable and can range from 3.50% APR to 10.20% APR, depending on your creditworthiness.
There are no disbursement or repayment fees, and you will not be penalized for prepayments. While your payments are deferred while you are in school, borrowers can also enjoy a nine-month grace period after graduation or cessation of half-time enrollment.
Students may apply in their final year of study if they are enrolled at least half-time, or they may apply up to twelve months after graduation. You must take the bar exam no more than twelve months after your graduation.
The PNC Solution Loan for Bar Study offers up to $15,000 for bar loans. Borrowers have an aggregate debt limit of $225,000, whether or not they are borrowing with a co-signer.
There are both variable and fixed interest rate options based on a variety of factors, including your credit history.
The variable interest rates range from 3.71% APR to 10.70% APR. The fixed rate loan interest rates range from 6.37% APR to 12.99% APR.
PNC does not charge application or origination fees. They also offer a six-month grace period after graduation or cessation of half-time enrollment.
You must apply during your final year of study or up to six months after graduation. And, you must sit for the bar exam no later than six months after graduation.
The repayment period is up to 15 years.
Discover Student Loans
With a Discover Bar Exam Loan, amounts can range from $1,000 to $16,000.
Discover offers both variable and fixed rate loan options. The variable interest rates range from 4.49% APR to 9.24% APR. Fixed interest rates range from 6.49% APR to 11.24% APR. The margins in both cases are based on the borrower’s creditworthiness.
There are no application, origination, or late fees, and payments are deferred while in school. Plus, there is no penalty for prepayments.
The grace period for the Discover Bar Exam Loan is nine months after graduation or cessation of half-time enrollment.
You may apply for this loan during your final year of study or up to six months after graduation.
The repayment period is up to 20 years.
You can borrow up to $12,000 with the Wells Fargo Bar Exam Loan.
There are both variable and fixed rate options for each borrower. Variable interest rates range from 8.85% APR (with discounts) to 9.07% APR (without discounts). Fixed interest rates range from 10.21% APR (with discounts) to 10.44% APR (without discounts).
There are no application or origination fees, and no penalty for paying off your loan early.
Your payments are deferred while you are in school, and you’ll receive a six-month grace period after graduation or after you cease half-time enrollment.
Borrowers can apply for this loan during their final year of school, or up to 30 days after graduation.
You must have had satisfactory academic progress in an eligible program and an established, positive credit history. You must be also a U.S. citizen, U.S. national, or permanent resident alien without conditions and with proper evidence of eligibility.
The repayment period is up to 7 years.
An Investment in Passing the Bar
The path to becoming a lawyer can be very expensive.
However, picking the best bar loans for your situation can be an excellent investment in your future career, while granting you freedom from financial concerns that could distract you from studying.
Ultimately, taking out bar loans can give you the financial breathing room necessary for you to focus on passing your bar exam and becoming a full-fledged practicing lawyer.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||Rates (APR)||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|7.39% - 29.99%||$1,000 - $50,000||Visit Upstart|
|5.29% - 14.24%1||$5,000 - $100,000||Visit SoFi|
|8.00% - 25.00%||$5,000 - $35,000||Visit Payoff|
|5.99% - 16.24%2||$5,000 - $50,000||Visit Citizens|
|5.99% - 35.89%||$1,000 - $40,000||Visit LendingClub|
|5.25% - 14.24%||$2,000 - $50,000||Visit Earnest|
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