The $500 Cap and 15% Fee
Kentucky regulates payday loans — officially "deferred deposit transactions" — under KRS 286.9-010 et seq. The total of all outstanding loans a borrower can have at once is capped at $500, and the service fee is limited to $15 per $100 of the check's face value. On a maximum $500 loan, that works out to a $75 fee plus a $1 database charge, for $576 total repayment.
Database Tracking Since 2010
The Kentucky Deferred Presentment Transaction System, introduced in May 2010, lets regulators and lenders track loans in real time across the state, which is what enforces the $500 total-outstanding cap rather than relying on borrowers to self-report existing loans.
New Licenses Have Been Frozen Since 2009
A 2009 law (S.B. 145) imposed a ten-year moratorium on new payday lender licenses in Kentucky and stopped new licenses from being issued — meaning the number of licensed lenders in the state has generally been shrinking as existing licenses lapse rather than being replenished by new entrants.
| Factor | Kentucky Rule |
|---|---|
| Maximum total outstanding | $500 per borrower |
| Fee cap | $15 per $100 borrowed |
| Database tracking | Kentucky Deferred Presentment Transaction System |
| New lender licenses | Frozen since 2009 |
Because the number of licensed lenders in Kentucky has been shrinking, comparing whichever options are actually still operating and licensed matters more here than in states with an open licensing market.
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