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Law Student Line of Credit

Law school can be very expensive especially for full time students. Even if a student can locate loans that pay for tuition they may have other expenses including books and room and board. These costs can quickly add up and make law school unaffordable for many people.

Some students can cover these costs by working but law school is a very labor intensive endeavor that doesn’t give students enough time for a job. This means that students may need a means of financing law school costs in addition to tuition.

Fortunately many lenders make lines of credit available to law students. A line of credit is an agreement in which a lender makes a set amount of credit available to a student. The student can use the credit to pay for expenses to law school.

Line of Credit vs. Student Loan

The difference between a law student line of credit and a student loan is that a line of credit is a promise of credit. The student only has to use the credit they want, and only payback the credit they actually use. As with a student loan the student will have to pay interest on a student line of credit.

The big advantage to a student line of credit is that the student can keep credit costs down. The student does this by only using the credit they need. Another big advantage is that it can provide extra money in case costs exceed the money provided by student loans.

Another advantage is that the interest rate on a law student line of credit is usually lower than that on credit cards. Many banks charge the prime rate on student lines of credit which is much lower than credit card interest rates. A disadvantage to a line of credit is that the prime rate may still be higher than the interest rate on student loans.

Finding a Law Student Line of Credit

Banks and online lenders like to make lines of credit available to law students because they are studying for a career that is often high paying. The lenders make money available to law students because they will one day be lawyers who will be making lots of money.

Law students should be able to get student lines of credit from banks and credit unions. Banks and credit unions associated with law schools maybe easier to work with for law students than other institutions.

Some law schools may make lines of credit available or have a special arrangement with a lender to provide lines of credit. A student can learn about these lines of credit from the school’s financial aid office.

Students should also be able to find lines of credit online. Typing the words law student line of credit into a search engine can help a student find these students.

Drawbacks to a Law Student Line of Credit

Whenever a student uses a law student line of credit they will have to pay the money back later on. This will increase the amount of debt has a student has when they enter practice.

A lawyer who enters practice with a lot of debt will see a large percentage of their salary spent on debt repayment. This can reduce a lawyer’s potential income and force a law student to take a job they don’t want just to pay back debts.