Payday loans in Kentucky

Are payday loans legal in Kentucky?

Payday loans are legal in Kentucky. A licensed lender may lend up to $500 and charge no more than $15 per $100 on face value of check + $1 database fee.

The governing law is Kentucky Rev. Stat. Ann. §§ 286.9.010 et seq… Kentucky Department of Financial Institutions licenses lenders and takes complaints.

Loan limits in Kentucky

• Loan size: up to $500
• Loan term: 14-60 days
• Loans at one time: A licensee shall not have more than two (2) deferred deposit transactions from any one (1) customer at any one time.

What a payday loan costs in Kentucky

State law sets the price rule: $15 per $100 on face value of check + $1 database fee.

On a $100 loan repaid after 14 days, the most a lender may charge is $16. You would repay $116, an APR of 417%. For comparison, most credit cards charge between 20% and 30% APR.

Before you deal with an online lender

1. Look the company up with Kentucky Department of Financial Institutions. No license, no loan.
2. Never pay a fee up front to get a loan. That is the mark of an advance-fee scam.
3. Read the agreement for the finance charge, the APR and the due date before you give out bank details.

If you cannot repay a loan in Kentucky

Contact the lender before the due date and ask for a payment plan in writing. If a lender or collector breaks the rules, file a complaint with Kentucky Department of Financial Institutions and with the CFPB. Our guide to what happens if you don’t pay covers each step.

Lower-cost options in Kentucky

• Credit union payday alternative loans (PALs): $200 to $2,000 at no more than 28% APR.
• A payment plan with the landlord, utility or hospital you owe often costs nothing.
• Local assistance: dial 211 for rent, utility and food programs near you.

See all payday loan alternatives or work out a loan’s price with the cost calculator.