Bar Study Loans: How They Work & Where to Find Them

Just because you’ve graduated from law school doesn’t mean you’re done studying to be a lawyer. You still need to pass the bar exam, and preparing for this exam can take months. During that time, many people choose not to work, instead opting for bar preparation courses to help maximize their chances of passing their exam.

Course fees, combined with a lack of income, can really add up. The good news is, bar loans are available to help. Bar study loans—also called bar prep loans—are a form of financial aid that comes from private student loan lenders and provides the funding necessary to cover living expenses and bar preparation course fees.

We’ll cover several of those lenders, plus other important factors, in this guide.

In this guide:

• LendEDU’s 5 Best Bar Study Loans
• What is a Bar Study Loan?
• Benefits of Bar Loans
• Downsides of Bar Loans
• Alternatives to Bar Study Loans

The 5 Best Bar Study Loans

LendEDU has ranked and rated 22 student loan lenders to determine which companies are best. Of those lenders, here are the top five that offer bar study loans.

Sallie Mae

Sallie Mae has been in the student loan business since 1973, although it originally began as a federal student loan servicer. Today, the primary business of this publicly-traded company is to provide private student loans, including bar study loans. Here are some of the key things to know about bar study loans from Sallie Mae.

• Loan Amounts: $1,000 – $15,000
• Loan Terms: 15 years
• APRs: 5.26% to 12.18% variable APR
• Application Deadline: You must be enrolled at least half-time in your final year of study at a U.S. law school and must be sitting for the bar exam no later than 12 months after graduation

Pros

Here are some of the advantages of Sallie Mae bar loans:

• No fees: You won’t pay an origination fee or a prepayment penalty.
• No loan payments required while in school: Repayment doesn’t start until nine months after graduation.
• Cosigner release: Cosigners can be released from the loan after the primary borrower makes 12 consecutive on-time payments.

Cons

• There’s no fixed rate option: Only variable rate loans are available, which means your loan rate could change over time.
• You must apply while still in school: If you’ve already graduated and are taking the bar exam, these loans are not available to you.
• You have a limited amount of time to take the bar: You must take the exam within 12 months of graduating.

Citizens Bank

Citizens Bank operates in 11 states throughout the United States and has more than 1,200 branches. It’s headquartered in Rhode Island and is the 24th largest bank in the United States. In addition to checking and savings accounts, Citizens Bank offers many other financial products. One of those products is bar study loans. If you’re a law student considering taking out a bar study loan from Citizens Bank, these are the key terms that you need to know.

• Loan Amounts: $1,000 to $16,000
• Loan Terms: 5 to 10 years
• APRs: 7.25% to 11.89% starting interest rate for variable rate loan; 7.89% to 12.70% for fixed rate loans
• Application Deadline: You must have graduated in the last six months or be within six months of graduating from a U.S. law school.

Pros

Here are some benefits of bar study loans from Citizens Bank:

• Fast application process: You can submit a loan application in 15 minutes or less.
• No Fees: You won’t pay an origination fee, application fee, or disbursement fee.
• Fixed and variable rate options: You have the flexibility to choose whether you want to ensure your monthly payments stay the same over time or to get a lower interest rate and potentially see rates change during the repayment process.
• Deferment options: You can defer payments while you’re still in school and for six-month after you graduate.

Cons

• Long waiting period for cosigner release: You’ll need at least 36 consecutive on-time payments to become eligible for the co-signer release.
• Interest rate is higher than some competitors: You’ll likely pay more interest with Citizens Bank than with many competitors on this list.
• Short deadline: You can only apply if you are within six months of graduating from law school or if you graduated no more than six months ago.

PNC

PNC Bank is headquartered in Pennsylvania but has 2,459 bank branches in 19 different states across the United States. The bank is the fifth largest in terms of the number of branches and the ninth largest in terms of assets. Wealth management, estate planning, and banking services are offered—including bar study loans. If you’re going to borrow to pay for your bar preparation and want PNC Bank to be your lender, here are some key things you need to know about its bar exam loans:

• Loan Amounts: $1,000 to $15,000
• Loan Terms: 1 to 15 years
• APRs: 4.66% to 11.79% fixed APR; 5.06% to 12.11% variable APR
• Application Deadline: You must apply within six months after graduating from an approved law school or must be enrolled at least half-time at a U.S. law school and scheduled to graduate within six months.

Pros

• Repayment Options: You could choose a repayment term of as little as one year, which is the shortest repayment period of any lender.
• No fees: You won’t pay an application fee or an origination fee.
• Fast approval: You can apply online and receive a decision within minutes of the time you apply.

Cons

• Long cosigner release: Cosigner release is not available until you’ve made 48 consecutive on-time payments.
• Short application deadline: You cannot apply for a bar study loan from PNC if you graduated more than six months ago.

Discover

Discover is headquartered in Chicago and is one of the largest financial service providers in the country. Perhaps best known for its credit cards, Discover offers a host of banking services, including private student loans and bar study loans. Here’s what you need to know if you’re considering using Discover to fund your bar exam preparation:

• Loan Amounts: $1,000 to $16,000
• Loan Terms: 20 years
• APRs: 7.39% to 12.99% fixed rate APR; 6.27% to 11.87% variable rate APR (Rates shown above include an interest-only repayment discount and a 0.25% rate reduction while enrolled in automatic payments.)
• Application Deadline: You must be enrolled in your last year of study in a graduate law degree program or must have graduated from law school within the past 6 months.

Pros

• In-school deferment options: You do not have to begin making payments on your loan until 9 months after graduation.
• Variable and fixed rate options: You have the flexibility to choose whether you want a fixed rate and steady payments or a variable interest rate that could change over time.
• No fees: You won’t pay any fees for loan origination and there are no application fees or prepayment penalties.
• Very long repayment period option: Just remember, stretching out your repayment over 20 years means you will pay much more in interest over time.

Cons

• No cosigner release: Your cosigner will remain liable for loan obligations for the life of the loan.
• Limited time to apply: You cannot obtain a Discover bar study loan if you graduated more than six months ago.

Wells Fargo

Wells Fargo is headquartered in San Francisco but has central offices through the United States. It’s the fourth largest U.S. bank as measured by total assets and is also a multinational financial services company providing a host of banking and financial services. Bar study loans are among the loans that Wells Fargo provides, and some of the key features you need to know about these loans include the following:

• Loan Amounts: $1,000 to $12,000
• Loan Terms: 7 years
• APRs: Variable rates start at 12.01% and fixed rates start at 12.45%.
• Application Deadline: You must be enrolled in an eligible school or have graduated no more than 30 days ago from an eligible law school.

Pros

• No fees: There’s no origination fee, prepayment penalty, or application fee.
• In school deferment options: You do not have to begin making payments until six months after you have graduated from law school.
• Co-signer release: You can qualify for co-signer release after 24 consecutive on-time payments. This is much shorter than many competitor requirements.

Cons

• Higher APR than competitors: Wells Fargo bar study loans start at a higher APR than loans offered by many competitors.
• Extremely short application deadline: If you graduated more than 30 days ago, you are not eligible for a Wells Fargo bar study loan.
• Limited options for repayment: You have less flexibility in your repayment timeline than with many other lenders.

What is a Bar Study Loan?

Bar study loans are private loans specifically intended for law school graduates who are preparing for the bar exam. These are offered only by private lenders—the Department of Education doesn’t provide any federal student loans for graduates who need time to study for the bar.

Applying for bar study loans will require you to submit a separate application with a private student loan lender. If you’d prefer not to do this, you could try to borrow more when you take out federal or private student loans during your last year of school. If you budget to determine how much money you’ll need to live on—and pay for bar review courses—and you’re able to borrow enough to pay for these costs, you won’t have to apply for a separate student loan.

However, it’s not always possible to make your money stretch this far, and you might not want to take on additional interest-bearing student loan debt earlier than you need to. If you can’t cover the costs of studying for the bar with your other student loans or by working, you will have no choice but to take out a bar study loan.

Benefits of Bar Loans

Some of the big advantages of bar loans include:

• Bar study loans provide the flexibility to study for the bar without worrying about how you’ll pay for school or bar prep programs.
• You can apply for bar study loans even after graduation. This isn’t possible with federal student loans.
• You can borrow more money. Most federal and private student loans are limited to the school’s estimated cost of attendance. With bar loans, you can obtain access to additional funds you need while studying for this important exam.

Downsides of Bar Loans

There are also some downsides of bar loans you need to be aware of, including the following:

• Bar loans often have higher interest rates than many other kinds of student loans.
• You don’t get borrower protections that federal loans provide.
• You often can apply for bar loans only for a limited period of time.

Alternatives to Bar Study Loans

If you don’t want to take out bar study loans, you have other options including:

• Getting help from an employer: Some employers will pay for you to study for the bar exam if you are hired to come work for them after graduation. If your employer does this, you usually must commit to staying with the employer for several years.
• Working while studying: This is impractical for most people, but you could try to work while you are preparing for the bar so you don’t need to borrow money to live on.
• Using leftover student loans: If you have money left from federal or private student loans obtained during the school year, you could use it to fund your bar study expenses.
• Personal loans: You could take out a personal loan from a bank, credit union, or online lender to help fund your expenses. But you’ll need to be able to qualify.

Bottom Line: Bar Study Loans Can Make Studying for the Bar Possible

You don’t want to worry about money when you’re trying to pass the bar exam. Bar study loans can make it possible for you to focus on preparing for the test without working or stressing about how to pay for courses or educational materials you need to become a lawyer. Just be sure to shop around to find the most affordable loan rates, and don’t borrow any more than you need because this will just turn into more debt you’ll have to pay back once you start working.