Compare Bar Loans for 2019

How to shop for a bar loan

1. Compare your bar loan options. Look for the lender that offers the lowest interest rate you qualify for. Bar loans are credit-based, meaning the higher your credit score, the lower the rate you’ll get.
2. Be aware of the fine print. Generally, lenders require that you apply for a bar loan in your last semester of law school or up to 12 months after graduation, and that you sit for the bar within 12 months of graduation.
3. Budget your bar loan disbursement. Unlike student loans, which are first disbursed to schools to be applied to tuition and fees, a bar loan will be disbursed directly to you.
4. Plan to pay off the loan relatively quickly. Bar loan terms range from one to 20 years, depending on the lender. Pay it off as soon as possible to save on interest — the major bar loan lenders don’t charge prepayment penalties. Repayment typically begins after a six- to nine-month grace period.
5. Refinance your law school loans if it makes sense for you. While you can’t typically refinance bar loans, refinancing your law school loans may free up cash to pay off the bar loan more quickly. Refinancing isn’t for you if you plan to use federal income-driven repayment plans or loan forgiveness programs.

» MORE: How to pay for law school

Bar loan alternatives

• Ask your employer for support. If you’ve landed your first job as a lawyer, consider that many law firms — especially those in Big Law — reimburse bar exam fees and prep courses, and some offer bar stipends, starting bonuses or salary advances, or a combination of those perks.
• Apply for bar preparation scholarships. Search for scholarships based on your location, legal field and minority status.
• Use leftover federal student loans. If you’ve already graduated, you can’t take out new student loans. However, you can use money remaining from your law school loans.
• Borrow federal direct unsubsidized loans. If you’re still in school, contact the financial aid office and ask about your federal student loan eligibility. Law students can borrow up to $20,500 of unsubsidized direct loans per year and $138,500 total, including undergraduate federal loans.
• Borrow federal Grad PLUS loans. PLUS loans have higher interest rates and fees compared with unsubsidized direct loans, but they also generally have higher borrowing limits — you can borrow up to the total cost of attendance, minus other financial aid. Your school may be able to increase your PLUS loan eligibility by increasing its estimated cost of attendance to include bar exam fees.

What to do if you're denied a bar loan

If you’re denied for a bar loan because you have bad credit and no co-signer, avoid unsecured personal loans and credit cards, which have high interest rates. Instead, try these alternatives:

• Review the bar loan alternatives. You may not need a bar loan — scholarships, employer reimbursements and federal student loans are better options if you can get them.
• Work while you’re studying for the bar. Sure, it would be great to have a few months of dedicated bar study time, but that’s not realistic for many people. A side hustle may be just what you need.
• Get a secured personal loan. Also known as a collateral loan, secured personal loans generally have lower rates than unsecured personal loans. To get one, you need to pledge an asset like your car or savings account.