The bad news is that most bar study loans are pretty terrible and the PNC loan certainly has its fair share of warts.

Bar Study Loan Basics

The purpose behind a bar study loan is to cover an aspiring lawyers living costs as well as bar study costs. This allows recent law school grads the opportunity to prepare for the bar without having to worry about how rent is going to get paid.

What makes bar study loans unique is that they are not student loans. Instead of the money going to your school’s office of financial aid, the money is sent directly to the borrower.

A bar study loan is nothing more than a personal loan with a couple of extra requirements.

In the case of the PNC bar study loan, borrowers must be finishing law school within six months, or have graduated from law school no more than six months prior. The borrower must also be planning on sitting for the bar within six months of graduation.

PNC Bar Study Loan Terms

PNC offers both fixed-rate and variable-rate bar study loans.  The variable-rate loans start at 1.96% while the fixed-rate loans start at 3.49%. On the low end, these rates are quite good. The bad news is that rates can start as high as 8.96% for a variable-rate loan and 10.49% for a fixed-rate loan. On the high side, these rates are awful.

Borrowers have up to 15 years to repay the loan and the loan also includes a six-month grace period.

PNC will loan a maximum of $15,000 for bar study. However, applicants must have a total aggregate student debt of less than $225,000, including federal and private student loans.

A Red Flag for Cosigners

One of the major issues with the PNC bar study loan is the cosigner release policy.  

Because these loans are likely to be utilized by many unemployed recent grads, we suspect that many will need a cosigner. PNC advertises that there is a cosigner release policy, but we suggest that all cosigners expect to be on the loan for the life of the loan.

In order to secure a cosigner release a borrower must:

• Make 48 consecutive on-time payments,
• Provide proof of income, and;
• Pass a credit check

Making four years worth of payments is a pretty high bar.

One late payment or one forbearance starts the 48-month clock at zero. For some perspective, many student loan lenders require 12 months of on-time payments.

The big concern on the cosigner release is the credit check that the borrower must pass at the end. PNC has almost no incentive to release cosigners from loans, and they don’t disclose what is necessary in order to “pass” the credit check.

The combination of these requirements makes any cosigner release a long shot.

Reviewing PNC Alternatives

For many grads, there is definitely the temptation to just suck it up and live with a lousy loan while getting ready for the bar. After many years worth of student loans, a bar study loan may seem like a drop in the bucket.

As we alluded to earlier, competitor bar study loans like the one offered by Sallie Mae could be an even worse option. The only comparable bar study loan to PNC would be the one offered by Discover.

Sadly, the best option may be to forgo incurring any additional debt. Crashing on a futon for a few months and living on ramen noodles may not sound ideal, but the approach has merit.

Another area worth investigating is a traditional personal loan. These options are more plentiful and less restrictive. Interest rates can vary considerably, but with lenders like SoFi offering rates starting under 6.00%, this avenue could be the ideal option.

Final Thoughts

Bar study loans are not consumer-friendly.  

They may be better than payday loans, but with interest rates over 10% in some cases, a bar study loan is a really expensive debt.

The PNC bar study loan is better than some of the other bar study loans available, but future lawyers would be wise not to limit themselves to loans specifically for bar study.

The post PNC Bar Study Loan Review appeared first on The Student Loan Sherpa.

The Student Loan Refinance marketplace is currently dominated by two types of lenders. The first group is financial tech companies specializing in student loans like SoFi or CommonBond. The second group is companies like LendKey and ELFI who are backed by regional banks and/or credit unions.

Large banks have nearly completely exited the student loan refinance business.

For consumers who wish to work with as few financial institutions as possible, refinancing with PNC might be appealing. Those looking for the best rates available might be best served by looking elsewhere as PNC’s refinance offer doesn’t really stack up well against the competition.

PNC Refinance Basics

The PNC options are a bit more limited than most other student loan lenders. Other companies usually have an option for a 7-year loan and a 20-year loan.

Like most other refinance lenders, PNC does not charge any loan origination fees or prepayment penalties.

PNC Refinance Advantages

Comparing the PNC refinance interest rates to the top lenders in the various loan categories, PNC seems to be the most competitive for 15-year loans.

Even though the advertised rates with PNC are still a bit higher than other lenders, PNC comes close enough where it might make sense to check your rate with PNC.

Another perk for PNC is the .50% interest rate reduction for automated loan payments. Nearly all other lenders offer the industry standard .25% reduction, so PNC definitely gets the edge on this perk.

Finally, PNC does not require that applicants have a degree. Many other lenders impose a degree requirement, so if you have a good job but no degree, PNC might be an appealing option.

PNC Refinance Review – The Disadvantages

One area of caution with the PNC refinance loan would be the cosigner release program.

We normally encourage borrowers and their cosigners not to rely on any cosigner release program, but the PNC requirements are especially strict. Borrowers must make on-time payments for 48 consecutive months in order to be eligible for a release.  

However, meeting this requirement alone is not sufficient to get the cosigner release from the loan. The borrower must also submit proof of income and pass an additional credit check. The PNC process is similar to many other lenders, but the 4-year repayment requirement is exceedingly long.

Another concern that borrowers should consider is the fact that PNC refinances federal government student loans in addition to private loans.

Nearly all lenders refinance federal loans, so this concern is not unique to PNC, but borrowers should carefully consider their options prior to refinancing their federal loans. Federal loans come with consumer protections such as income-driven repayment plans and student loan forgiveness programs, like Public Service Loan Forgiveness.

PNC Review Final Thoughts

When compared to the student loan startups and offerings from regional banks and credit unions, PNC falls short.

Due to the higher interest rates, a long cosigner release period, and limited refinance options, PNC lands towards the bottom of our refinance lender rankings.

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