Preparing for and taking the bar exam can be an expensive undertaking for prospective lawyers. The University of California, Irvine School of Law says candidates should set aside $5,800 for the California bar exam.
That figure doesn’t even include living expenses at a time when studying could be your full-time job.
If you’re concerned about your financial situation as you prepare for the bar exam, there are bar loans available to help you cover your costs. Here’s what you need to know about bar loans and how to qualify for one.
What are bar loans?
Bar loans are private student loans you can apply for to help you cover the costs of preparing for and taking the bar exam and prevent you from living off rice and beans in your parents’ basement the meantime.
Since bar loans are private loans, their interest rates and fees might be higher than the rates and fees for federal student loans. You’ll also need decent credit to get approved or at least a cosigner who has good credit.
Either way, it’s critical that you apply early to avoid any issues with the deadlines associated with your bar exam.
The 3 best private student loans for the bar exam
Few private student loan companies offer bar loans, so it can be difficult to find one unless you know where to look. To reduce your research time, we’ve pared down the list to the top three bar loans from private lenders.
Sallie Mae Bar Study Loan
Sallie Mae*†, one of the largest providers of private student loans, offers bar loans from $1,000 to $15,000. The lender offers only variable interest rates, which can change over time.As of February 2018, those rates are 4.62% APR to 11.32% APR.
Here are some more highlights:
- You don’t have to start making payments until nine months after you leave school, which you need to attend at least half time.
- You can opt for interest-only payments for the first two or four years as you’re establishing yourself financially.
- There’s no origination fee or prepayment penalty for paying off the loan early.
- You can get a 0.25% rate reduction if you set up automatic payments.
- If you have a cosigner, you can apply to release that cosigner if you meet certain credit requirements and make on-time payments for 12 months.
To be eligible for the loan, you have to meet the following requirements:
- Be enrolled at least half time in your final year of study at a participating law school or have graduated in the last 12 months.
- Take the bar exam within 12 months of graduation.
- Be a U.S. citizen and permanent resident or a noncitizen with a cosigner who is a U.S. citizen or permanent resident and meets Sallie Mae’s credit requirements.
PNC Solution Loan for Bar Study
PNC is a full-service bank that offers several financial products, and one of them is the PNC Solution Loan for Bar Study. You can borrow up to $15,000, but your loan can be limited by the bank’s aggregate debt limit of $225,000 from all federal and private student loans.
PNC offers both variable and fixed interest rates. Here are the ranges as of February 2018:
- Variable interest rates: 4.58% APR to 11.53% APR
- Fixed interest rates: 6.36% APR to 12.99% APR
You also can also score an interest rate reduction of 0.50% if you set up automatic payments. That’s double what many of the best private student loans offer.
Here are more details about the loan:
- You’ll pay no application or origination fees.
- You’ll get a six-month grace period you leave school, after which you’ll have up to 15 years to repay the loan.
- If you have a cosigner, you can apply for cosigner release after 48 months of consecutive on-time payments.
- There’s no minimum income requirement.
To qualify for the PNC Solution Loan for Bar Study, you must:
- Apply during your final six months of study at a PNC-approved law school or within six months after graduation.
- Plan to sit for the bar exam no later than six months after graduation.
- Have at least two years of good credit history and two years of continuous income or employment history.
- Be a U.S. citizen or permanent resident who’s lived in the U.S. for the previous two years.
Discover Bar Exam Loan
Although Discover started out as a credit card company, it’s now one of the most popular internet-only banks in the nation.
In addition to offering banking products, Discover offers some loan products, including the Discover Bar Exam Loan. With it, you can borrow between $1,000 and $16,000.
Like PNC, Discover offers both variable and fixed interest rates. Here are the available ranges as of February 2018:
- Variable interest rates: 5.12% APR to 10.12% APR
- Fixed interest rates: 6.99% APR to 11.49% APR
You also can get a 0.25% rate reduction when you sign up for autopay.
One thing that sets Discover apart from other lenders is the fact that, in addition to charging no application or origination fees, it doesn’t charge any late fees. Plus, you won’t get penalized if you pay off the loan early.
Here are some other highlights:
- You can choose between two repayment periods: in-school, which requires that you make $25 monthly payments while you’re in school, and deferred, which doesn’t require any payments until nine months after you graduate or drop below half time.
- You’ll have 20 years to repay the loan.
- Unlike the other lenders we’ve listed, Discover doesn’t offer cosigner release.
To be eligible for a Discover Bar Exam Loan, you must:
- Apply during your final year of study or within six months of graduating.
- Be a U.S. citizen, permanent resident, or international student with a cosigner who is a U.S. citizen or permanent resident.
- Be at least 16 years old.
Which of these bar loans should you choose?
While we’ve listed the best private student loans to help you study for the bar exam, there’s no one best option for everyone.
For example, if you plan to have a cosigner, Sallie Mae offers a better cosigner release program than the other lenders do. But if you want a fixed interest rate or a lower interest rate in general, PNC might be a better option.
Lastly, if you want a longer repayment period or an option that forces you to make payments while you’re in school to lower your debt burden, Discover might be the best choice.
Regardless of which lender you choose, bar loans can help you invest in your law career without worrying about your finances. The best private student loans can offer the financial breathing room you need to focus on passing your bar exam and becoming a full-fledged practicing lawyer.
Emily Guy Birken contributed to this article.
*Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
†The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
Need a student loan?Here are our top student loan lenders of 2018!
1 = Citizens Disclaimer.
2 = CollegeAve Autopay Disclaimer: All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
|3.54% - 12.07%2||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|4.11% - 12.19%||Undergraduate and Graduate||Visit Ascent|
|4.00% - 11.85%*3||Undergraduate and Graduate||Visit SallieMae|
|2.93% - 9.67%||Undergraduate, Graduate, and Parents||Visit CommonBond|
|3.80% - 11.99%1||Undergraduate, Graduate, and Parents||Visit Citizens|
|4.53% - 9.69%||Undergraduate and Graduate||Visit LendKey|