How Kentucky Regulates Payday Loan Amounts?
- According to the state law of Kentucky, a borrower can only take out less than 2 loans at a time from one lender every two weeks
- At any given time, a borrower is only allowed to have a total of $500 in outstanding loans
What Are the Finance Charges in Kentucky?
A two-week loan of $100 cannot have a finance charge of more than $15. Lenders are prohibited to charge over $15 per $100 on the value of the deposit check
Licensed lenders are not permitted to charge fees for service greater than $15 per $100 on the value of the deposit check. Any fee must be prorated according to the maximum fee of $15. ( (Stat. Ann. 286.9-010 et seq.))
A $300 payday loan in Kentucky has an APR of 460% (*According to the Center for Responsible Lending 2019)
How Is the APR Calculated For a $100 Payday Loan in Kentucky?
If the term is 14 days
Interest Rate (APR): 460%*
Loan Cost: $100*460%*(14/365)=$17.6
To Return: Principal+Loan Cost=$100+$17.6=117.6
What Are the Maximum Term for a Payday Loan in Kentucky?
- The maximum loan term is 60 days.
- State law prohibits rollovers and all loans must be repaid in time.
- After repaying an existing loan, borrowers are eligible for a new loan. There is no cooling-off period between loans
Since July 2020, as permitted by the Consumer Financial Protection Bureau (CFPB), lenders are no longer required to verify if a borrower can repay the loan. Before taking out payday loans, access your current financial situation to see if you have the ability to meet your financial obligations. Default payment penalties can throw you into a never-ending cycle of debts
- No more than one non-sufficient funds fee can be charged for each defaulted loan; its amount is not specified. The fee amount is not specified.
- Lenders are allowed to file a court action so as to collect unpaid loans from borrowers.
You can find more information about payday loans in Kentucky on the website of the Kentucky Department of Financial Institutions
Besides, borrowers can submit queries and check the status of their payday loans through the Kentucky Deferred Presentment Transaction System