When you’re in a tight spot financially, you might just need a few hundred dollars to cover an emergency expense. If you live in Kentucky, you can apply for a payday loan of up to $500 to help you out of a short-term situation.
Can I get a payday loan in Kentucky?
Yes, but with some restrictions. Kentucky Revised Statutes Ann. §§ 286.9.010 et seq. govern the functions payday lenders. Under these laws, the maximum you can borrow through a cash advance in Kentucky is $500. A lender cannot provide more than two payday loans to a customer at any one time. And the cumulative total of all your existing payday loans cannot exceed $500.
Maximum loan amount: $500
Loan term: 14 to 60 days
APR: The APR for a 14-day $100 loan is 459%
Before you borrow, remember that payday loans are costly forms of credit and should only be used for short-term emergencies, not long-term financial troubles.
Must read: Lawmakers seeking to further regulate lenders
Because payday lenders have had predatory practices in the past and many have disobeyed Kentucky state law regarding how much a person can borrow, lawmakers are seeking to increase the fees they charge payday lenders for violating the law. In addition, despite some stores having been cited multiple times for illegal activity, none have been shut down.
With new technology in place to scan for suspicious transactions, the number of citations has gone up, protecting consumers from lenders that might have allowed them to borrow more than the legal amount.
Familiarize yourself with Kentucky laws–how much you can borrow and how much a lender can charge in fees–before borrowing. If your lender is trying to act under the law, contact the Kentucky Office of Financial Institutions.
Kentucky payday loan laws set limits on how much your loan can end up costing. Here’s what you need to know:
Finance Fees: $15 for every $100 borrowed and a $1 database fee
Finance Charge: A 14-day $100 loan has a charge of $17.65
Collection fees: One non-sufficient funds (NSF) fee; must be disclosed in contract
If you aren’t sure you’ll be able to afford a payday loan, don’t take one out. Instead, consider some of your local options that can help make your regular bills easier to afford, like the Supplemental Nutrition Assistance Program (SNAP) or the Low Income Home Energy Assistance Program.
You can get a payday loan online or in-store, but you’ll need to be at least 18 years old, an American citizen or permanent resident and have a regular source of income in order to qualify for most payday loans. You should also be prepared to supply your Social Security number, details about your employment and other personal information in order for the lender to confirm your identity.
If you’re applying online, a lender may request access to your checking account in order to deposit your loan and debit your payment when the loan is due.
If you’re in need of quick cash, a payday loan may be an option for you. It can provide funding for an unexpected expense — and if you can pay it off by the due date, you won’t face extra fees or charges. Keep in mind, though, that some illegitimate lenders don’t operate by the law. You’ll need to keep a lookout for lenders that follow all the rules laid out by Kentucky so you don’t find yourself in seemingly endless cycles of debt.
Frequently asked questions
You can have two loans at once provided they total less than $500.
No. Kentucky law bans rolling over or refinancing payday loans for a few, however some lenders my offer a repayment plan.
No. Kentucky law doesn’t require a cooling off period between loans, but it’s in your best interest to avoid taking out one loan after another as these can quickly accumulate high amounts of interest you will have to pay off.
You should get in touch with the Kentucky Office of Financial Institutions.
Elizabeth Barry is Finder's global fintech editor. She has written about finance for over six years and has been featured in a range of publications and media including Seven News, the ABC, Mamamia, Dynamic Business and Financy. Elizabeth has a Bachelor of Communications and a Master of Creative Writing from the University of Technology Sydney. In 2017, she received the Highly Commended award for Best New Journalist at the IT Journalism Awards. Elizabeth's passion is writing about innovations in financial services (which has surprised her more than anyone else).
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