Payday Loans are Legal in Kentucky

Beware of predatory lending

Payday Lenders in Kentucky

Payday loans provide short-term funding solutions for borrowers to access cash quickly. They are most often used to cover unexpected costs or emergency situations, like car repairs or medical bills.

According to recent data, 83% of payday loans in Kentucky are used to cover everyday expenses and about 1 in 8 Kentucky adults have taken out a payday loan. They are often criticized for their high interest rates and fees that make it difficult to repay, but yet they remain a common solution to residents in need of immediate financial help. In Kentucky, there are over 500 storefronts offering payday loans, making it one of the states with the highest number of payday lending locations. Borrowers should exercise caution when deciding on a payday loan and make sure you understand all the terms, conditions, and charges. Before committing to payday loans, borrowers should explore other options that may be out there.

Borrowers should always compare the lenders located in Kentucky and choose a lender that adheres to state regulations before they sign on the dotted line. Be wary of lenders that do not disclose their fees or interest rates up front, it may indicate predatory practices. The Kentucky Deferred Deposit Transaction System provides a database of licensed payday lenders in the state, making it easier for borrowers to select a reputable lender. Overall, payday loans can be a viable solution in a financial emergency, but borrowers must be aware of the potential risks and make informed decisions.

Payday Loan Laws

Each state has its laws surrounding payday lending, and Kentucky has been making moves in the direction of banning payday loans in the state. Recently, a piece of legislation was passed that separated the licenses for check cashers and payday loans and prohibits new licenses for payday lenders. The state also has a transaction system in place to track all payday lending that occurs and make sure lenders are following all regulations concerning loans.

The State of Kentucky has several pieces of legislation surrounding payday loans:

Loan Terms and Conditions

Maximum loan amount: $500

Maximum Interest Rate: 417%

Minimum loan term: 14 days

Maximum loan term: 60 days

Number of rollovers allowed: None

Finance Charge: $1 database fee and 15% of loan amount

Legal action: 10 Years

Certified Payday Lenders in Kentucky

Company Name	Company score	License Status
PNC Bank N.A.	7.9	Valid
Cash Express, LLC	7.5	Valid
Check Into Cash, INC	7.1	Valid
LDF Holdings, LLC	6.8	Valid
BlueChip Financial	6.1	Valid
Tribal Lending Enterprise, Inc.	6	Valid
Cash Express, LLC	5.7	Valid

History of Kentucky Payday Loans

Payday lending in Kentucky has a complex history. The Kentucky legislature passed HB 747 in 1992, which required check cashing businesses to be licensed by the Department of Financial Institutions, but deferred deposit transactions were not yet mentioned. From 1992-1998, deferred deposit businesses proliferated, offering transactions without interest rate or fee caps. In 1998, HB 266 capped service fees at $15 per $100, but in 1999, the Kentucky Supreme Court found that prior to 1998, deferred deposit businesses were not exempt from state usury laws, potentially rendering past transactions illegal. In 2009, a payday loan law was passed that limited borrowers to two loans totaling $500, and implemented a 10-year moratorium on new check cashers. In 2010, a statewide database was added to enforce the limitation, and while a bill to cap interest rates at 36% failed in 2018, in March 2019, a new law banning all new payday loan providers in the state is expected to eventually weed out all payday lending in the state.

State Resources

How to file a complaint

The Kentucky Office of Financial Institutions regulates payday lenders in Kentucky and provides information about payday lenders’ licenses or complaints. Borrowers can file complaints against lenders online using their complaint form. Due to the open records laws in Kentucky all information provided in the complaint could be made public.

Kentucky Payday Loans Debt Relief

How to Get out of Payday Loan Debt?

Payday loans are a quick way to turn an urgent need for temporary funds into a debt cycle that never ends. It can be difficult to find a balance between repaying payday loans and keeping up with living expenses, which often leads to more borrowing. Kentucky payday loan borrowers can still escape debt, even though it seems difficult. Borrowers should try contacting their lender to negotiate repayment plans that are easier to manage, including reducing the amount owed or increasing payment terms. You may also want to consider refinancing your loan with a lower rate. Borrowers should only file for bankruptcy as a last resort, and discuss it with a lawyer before doing so.

Support Resources

Types of Quick Loans in Kentucky

Cash Advance Apps Cash advance apps have become popular in recent years, but it is important to carefully review the terms and conditions before using them. Kentucky residents should be aware that some apps may charge high fees. It may be helpful to research the app and read reviews from other users before using it. Additionally, borrowers should only use cash advance apps if they are confident they can repay it on time.

Installment Loans Installment loans in Kentucky may be a good option for those who need to borrow funds and repay the loan over time. Kentucky residents may want to explore local credit unions or banks for installment loan options, which may have lower interest rates and fees than online lenders. Borrowers should also make sure they understand the payment schedule and budget accordingly to avoid missing payments.

Credit Card Cash Advances In Kentucky, credit card cash advances enable borrowers to withdraw money from their account rather than make an in-store purchase. These advances are convenient, but they come with higher fees and interest rates than regular credit card purchases. Credit card cash advances usually accrue interest immediately, so borrowers are required to pay interest on the borrowed money right away. Before deciding whether to obtain a cash advance on a credit card, the borrower should carefully review their credit card agreement and weigh up the benefits and costs.

Alternatives to Payday Loans in Kentucky

Personal Loans

Personal loans in Kentucky can provide access to funds for a variety of purposes, including debt consolidation, home repairs, or emergency expenses. Kentucky residents may want to consider local credit unions or banks for personal loan options, which may have lower interest rates and fees than online lenders. Additionally, personal loans may have fixed or variable interest rates and borrowers should choose the option that best fits their needs and budget.

Land Loans

In Kentucky, land loans can provide financing for purchasing land for residential or commercial purposes. These loans may be offered through local lenders and may have fixed or variable interest rates. Additionally, borrowers should be aware that land loans may require a downpayment and may have specific eligibility requirements.

Farm Loans

Farm loans in Kentucky may be available for those who operate agricultural businesses. These loans can be used for purchasing land, equipment, or supplies. Kentucky residents may want to explore local lenders or the USDA for farm loan options. Farm loans may have specific eligibility requirements and may require collateral.

Bad Credit Loans in Kentucky

Bad credit loans may be available for those living in Kentucky who have a low credit score. They may be helpful to work on improving credit score to access better loan options in the future. However, borrowers should be aware that these loans may come with higher interest rates and fees. They are available in both secured and unsecured forms, with secured loans requiring collateral, such as a vehicle or savings account. Borrowers with bad credit scores are advised to perform thorough research and compare terms and fees from different lenders before borrowing. They may be helpful to work on improving credit score to access better loan options in the future.

Kentucky Small Business Loans

There are several types of small business loans available in Kentucky, including:

SBA loans: Loans that are partially guaranteed by the U.S. Small Business Administration and are designed to help small businesses access capital and obtain favorable loan terms.
Kentucky Small Business Credit Initiative (KSBCI): A loan program designed to provide financing to small businesses that have difficulty accessing credit.
Kentucky Economic Development Finance Authority (KEDFA): KEDFA offers low-interest loans to small businesses for various purposes, including real estate acquisition, equipment purchase, and working capital.
Kentucky Agricultural Finance Corporation (KAFC): KAFC offers loans to farmers and agribusinesses for various purposes, including equipment purchase, land acquisition, and working capital.
Merchant Cash Advance: A lump sum of money provided to businesses in exchange for a percentage of future credit and debit card sales.

VA loans in Kentucky

VA loans are available to Kentucky veterans, service members, and their eligible spouses. These loans can provide financing for the purchase of a home, including new construction or refinancing an existing mortgage. VA loans may offer competitive interest rates, and there is no requirement for a down payment or private mortgage insurance. In addition, they have more flexible credit and income requirements than other loan options. Kentucky has a strong military presence, with several military bases and installations located throughout the state. As a result, VA loans may be a popular financing option for veterans and their families.

Kentucky Student Loans

Many options are available to Kentucky students to help finance their college education. These options include:

Federal Student Loans: These loans are offered by the federal government and include Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans.
Kentucky Higher Education Student Loan Corporation (KHESLC): KHESLC offers a variety of loan programs, including the Advantage Education Loan for undergraduate and graduate students and the Advantage Parent Loan for parents of undergraduate students.
Kentucky Educational Excellence Scholarship (KEES): his program provides scholarship money to Kentucky high school students who achieve high academic standards. The scholarship can be used at eligible Kentucky colleges and universities.
Private Student Loans: Loans from private lenders, they commonly have higher interest rates and may require a co-signer.

Kentucky Income Information

Kentucky’s economy is largely dependent on manufacturing, agriculture, and healthcare industries. The state has a relatively low cost of living, according to the 2021 U.S. Census, Kentucky had a median household income of $55,454, significantly lower than the national median of $69,012. Median household income and poverty levels vary significantly by county in Kentucky, with Oldham County having the highest median income at $103,761, a staggering 98.6% above the state average, and Kent County has the lowest at $22,292, 57.3% below the state average. The poverty percentage in Kentucky in 2021 was 16.5%.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on April 24, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: Kentucky . Accessed on April 24, 2023.

Kentucky Payday Lender Complaints

Below are trends associated with some payday lenders in Kentucky, as reported to the Consumer Financial Protection Bureau.

Company Name	Count
Cash Express, LLC	6
Check Into Cash, INC	3
LDF Holdings, LLC	5
BlueChip Financial	4
Tribal Lending Enterprise, Inc.	4
Total Complaints	77

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on April 24, 2023.

Most Common Issues

Complaint type	Count
Struggling to pay loan	16
Can’t contact lender	13
Charged unexpected fees or interest	11
Can’t stop withdrawals from bank account	9
Money withdrawn on wrong day/amount	8

What are the main reasons residents of Kentucky apply for payday cash advance online or offline

Payday loans are typically used for nonnegotiable everyday expenses like your rent, utilities, and groceries. Per data reported by Pewtrust, the percentage of reasons described below

Reason	Share
Regular Expenses (Utilities, car payment)	53%
Unexpected emergency/expense	16%
Rent/Mortgage	10%
Something Special	8%
Other	5%
Did not answer	2%

Payday Lenders by City

Louisville/Jefferson
Lexington-Fayette
Bowling Green
Owensboro
Covington
Georgetown
Richmond
Florence
Nicholasville
Elizabethtown

Hopkinsville
Jeffersontown
Frankfort
Independence
Henderson
Paducah
Radcliff
Ashland
Madisonville
Erlanger

Winchester
Burlington
Mount Washington
St. Matthews
Murray
Fort Thomas
Danville
Shelbyville
Shively
Berea

Frequently Asked Questions

Will applying for a payday loan impact my credit?

Payday loans are typically not reported to the three major credit reporting agencies, and most lenders do not conduct credit checks as part of their application process.

What do I need to apply for a payday loan?

To apply for a payday loan in Kentucky you will need valid identification, proof of monthly income and bank account information.

Can I cancel my payday loan?

Yes, you can cancel your payday loan but you will have to return what you borrowed and any interest fees that you may have accrued up to that point.

Can a payday loan lender garnish my wages?

Payday loan lenders can garnish your wages in Kentucky if they have a court order allowing them to do so.

Can spouses have separate loans?

Yes, spouses can have separate payday loans in Kentucky as long as they individually meet the lender’s eligibility requirements and can provide the necessary documentation and information to apply.

When will I receive my funds if I am approved for a payday loan?

Funds are typically received on the same day or the next business day after loan approval, and can be disbursed through various methods, such as direct deposit or a prepaid debit card.

What happens if I can’t repay my payday loan on time?

If a borrower is unable to repay their payday loan on time in Kentucky, the lender may charge additional fees, extend or roll over the loan, report the delinquent account to credit bureaus, or pursue legal action.

When could I apply for another payday loan?

Borrowers can apply for another payday loan as soon as they have repaid their current loan in full, but it’s important to consider alternative options for borrowing.