What are the Payday Loan Rules in Kentucky?
Payday loans in the US are regulated by both state and federal laws. The loans are a type of small loans that are given out to individuals to meet small cash shortfall. States have put different rules regarding payday loans. Here we will take a close look at the payday loan regulations in the state of Kentucky.
Knowing about the loan regulations in a state is important. It will ensure that you are not being duped into paying a large amount of loan rates and fees.
Payday Loan Regulations in Kentucky
The payday loans are permitted in the state of Kentucky. These loans subject to provisions contained in Kentucky Rev. Stat. Ann. §§ 286.9.010 et seq. While the payday loans are allowed in the state, it is subject to certain restrictions.
Lenders are not allowed to provide more than $500 payday loan. Moreover, the maximum loan term is 14 to 60 days. The states laws allow a maximum charge of $15 per $100 amount plus a database fee of $1. The maximum finance charge allowed on a 14-day loan is $17.65. Moreover, the annual percentage rate (APR) on a loan of $100 is 459 percent.
There are also limits on the number of outstanding loans given at one time. The payday loan lenders cannot give more than two $500 loans at a time. Moreover, no rollover of the loan amount is allowed. The borrowers cannot renew or consolidate their payday loan. The state law allows one nonsufficient fund (NSF) fee to be charged to the borrowers if it is disclosed to them.
The Kentucky payday loan laws have also imposed restrictions on the collection of the loan amount. The inability to pay a loan due to being poor is not considered an offence in the state.
This means that lenders are not allowed to file a criminal lawsuit against a borrower no matter how long the loan amount is due. This means that the borrowers cannot be put to jail in case of nonpayment of the debt amount.
In the state of Kentucky, the repayment period cannot be more than sixty days. The minimum period for repayment of the loan amount is fourteen days. The legal requirements regarding repayment period have been put in place to avoid borrowers from facing undue hardship due to obtaining the loan.
Local Office Requirement
Online payday loan lenders are not allowed to offer loans to the residents of Kentucky unless it has a physical office located in the state. Lenders that offer online loans are not legally allowed by the state to provide payday loans. Also, the lenders can revoke permission for automatic payments for repayment of the loan.
If you have any complaint regarding payday loan lender in the state, you can call 800 (220) 2579 or send a written application to 1025 Capital Center Drive, Suite 200 Frankfort KY 40601. The state authorities will carry on legal action on your behalf against the payday lender.