What a title loan costs — before Kentucky’s rules
A title loan is usually a single-payment loan due in 15–30 days at around 25% per month — roughly 300% APR — secured by your vehicle. The defining risk is not the rate but the collateral: miss a payment and the lender can repossess the car, and research finds about one in five borrowers eventually loses the vehicle. Where a state caps rates low, single-payment title lending is not offered and a loan above the cap is generally void.
The law in Kentucky
- Rate cap
- 3% per month (36% APR) on unpaid principal up to $15,000 under the Consumer Loan Company Act (KRS 286.4-530/533). The former high-cost title-pledge regime (KRS 286.10) no longer exists.
- Key law
- KRS Chapter 286, Subtitle 4 (Consumer Loan Companies). Subtitle 10 (Title Pledge Lending, KRS 286.10) was repealed by HB 726, effective July 15, 2024.
- Enforcement
- The Kentucky Department of Financial Institutions (DFI) regulates lenders; HB 726 removed DFI’s authority to charter title-pledge lenders.
HB 726 (effective July 15, 2024) repealed Kentucky’s Title Pledge Lending statute (KRS 286.10) in its entirety, including the authority to charter such lenders.
What it means for a Kentucky borrower
Kentucky used to be a high-cost title-loan state, but as of July 15, 2024 the dedicated title-pledge law was repealed. Any title-secured loan today must be made by a licensed consumer loan company capped at 3% per month (36% APR), far below the 200%+ APRs of open states.
If you already have a title loan in Kentucky
A loan that violates Kentucky’s rate limits may be partly or fully unenforceable — which changes your options with the lender and any collector. This is general information, not legal advice.
- Check whether the lender is licensed in Kentucky — many high-cost online lenders are not.
- Revoke ACH authorization in writing to stop automatic withdrawals from your account.
- File a complaint with the Kentucky attorney general and the CFPB.
- Ask whether the balance is even collectable under Kentucky law before you pay a collector.
Cheaper first — try these before a title loan in Kentucky
Title Loans and tribal lenders in Kentucky
Many online lenders that market title loans to Kentucky residents are tribal lenders arguing their sovereignty places them outside state rate caps — a separate legal question this site tracks in depth. For which tribal brands lend to Kentucky residents and how state law applies to them, see the Kentucky tribal-lending page.
Tribal loans in Kentucky →Frequently asked questions
Are title loans legal in Kentucky?
In Kentucky, title loans are allowed only under limits — a rate cap, an installment structure, or consumer-finance licensing — so a legal title loan costs less and looks different from the ~300% single-payment norm, and any lender exceeding those limits is out of compliance.
What is the maximum title loan rate in Kentucky?
3% per month (36% APR) on unpaid principal up to $15,000 under the Consumer Loan Company Act (KRS 286.4-530/533). The former high-cost title-pledge regime (KRS 286.10) no longer exists.
What can I do about a title loan I already have in Kentucky?
Because Kentucky restricts high-cost title loans, a loan that exceeds the state limit may be partly or fully uncollectible. Check whether the lender is licensed in Kentucky — many high-cost online lenders are not. This is general information, not legal advice.