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 6-month grace period prior to entering repayment.
- 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 2019!
|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 2/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* 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.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.23% – 13.23%1||Undergraduate and Graduate|
|4.20% – 11.44%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.50% – 10.11%*,4||Undergraduate and Graduate|
|4.25% – 13.25%5||Undergraduate and Graduate|
|5.85% – 6.99%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.42%8||Undergraduate, Graduate, and Parents|