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Usury Laws in Kentucky

In Kentucky, the legal rate is 8%, written loans with an original principal of $15,000 or less are capped at the lesser of 19% or 4 points over the Federal Reserve discount rate, and larger written loans may carry any agreed rate.

Last checked . General information, not legal advice.

Kentucky at a glance

Maximum agreed rate
Lesser of 19% or Fed discount rate plus 4 points
Applies to written loans of $15,000 or less. Written loans over $15,000 may carry any agreed rate.
Legal rate (no rate agreed)
8%
Judgments bear 6% compounded annually, or the contract rate for judgments on a written obligation (KRS 360.040).

Sources

Last checked

The rules in Kentucky

What is the maximum interest rate on a private loan in Kentucky?

Maximum agreed rate in Kentucky: Lesser of 19% or Fed discount rate plus 4 points. Applies to written loans of $15,000 or less. Written loans over $15,000 may carry any agreed rate.

What interest rate applies in Kentucky when no rate was agreed?

Legal rate (no rate agreed) in Kentucky: 8%. Judgments bear 6% compounded annually, or the contract rate for judgments on a written obligation (KRS 360.040).

Where do the Kentucky usury laws come from?

The rules above come from Ky. Rev. Stat. 360.010 and Ky. Rev. Stat. 360.040. Each source is linked on this page. We last checked them in October 2026.

Good to know

Since June 29, 2017, judgments generally bear 6% interest compounded annually, and judgments on a written contract or promissory note bear the rate stated in it (KRS 360.040).

What this means in practice

Put the interest rate in writing. Many usury statutes set one limit for written agreements and a different, often lower, rate when nothing was agreed in writing. A signed promissory note or loan agreement that states the rate, the payment schedule and what happens on late payment avoids most disputes.

Count every charge, not only the stated rate. Courts may treat fees, points, required extras or a discount taken from the amount lent as interest when deciding whether a loan is usurious. A loan with a modest rate and large fees can still cross the limit.

Check who the lender is and what the loan is for. Usury limits often do not apply, or apply differently, to banks, licensed consumer lenders, credit card issuers, larger loans and loans to businesses or corporations. A rule written for loans between individuals may not cover your situation, so read the statute and its exceptions.

General information, not legal advice. Laws change, and cities can add their own rules, so check the current statute before you rely on it.