Best Personal Loans in Kentucky for 2024

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Reviewed byAlvin Yam, CFP
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Updated: April 11, 2024

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MoneyGeek analyzed factors such as reputation, interest rates and loan term options to find the best lender in Kentucky. With a MoneyGeek score of 97, First Tech is our pick for Kentucky's top lender for personal loans. It excelled in loan flexibility and consumer transparency. PenFed follows with a MoneyGeek score of 96. It offers competitive rates and impeccable customer service.

If you are a Kentucky resident with a credit score of around 705, you have a greater chance of having favorable loan options. Your debt-to-income ratio and income history also matter when applying for a loan.

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UNDERSTAND YOUR DEBT-TO-INCOME RATIO

Your monthly debt payment relative to your monthly gross income is called your debt-to-income ratio, or DTI.

Most lenders prefer a debt-to-income ratio of 35% to 40% or below for secured loans and 40% to 45% or below for unsecured personal loans. A debt-to-income ratio above 50% is considered high, so approval may be more difficult, or your loan may have higher interest rates.

Alvin Yam, CFP®

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Calculate Your Monthly Loan Payment

Explore your loan options with our personal loan calculator. This simple tool calculates monthly payments and total loan costs based on the amount, interest rate and term length, helping you make informed decisions before committing.

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IS INTEREST ON PERSONAL LOANS TAX DEDUCTIBLE?

Interest on personal loans is generally not tax deductible, as personal loans are considered consumer debt. But there are some exceptions where the interest may qualify:

  • When consolidating high-interest qualifying debts like credit cards or student loans, if used to pay off those debts.
  • If used for home improvements that increase the home's value.
  • If the loan proceeds can be demonstrated as used exclusively for business expenses or starting a business.
  • In some cases, if the loan is used for investment purposes related to income-generating assets.

Alvin Yam, CFP®

Impact of Credit Score on Loan Repayment in Kentucky

Lenders will assess your credit score, income, and debt-to-income ratio to determine your creditworthiness and eligibility for the loan. Enhancing your credit score before applying may be advantageous, as a higher credit score can significantly improve your loan terms.

Refer to the table below to see how different credit scores can affect your monthly loan payments.

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This table approximates monthly payments, calculated using median personal loan interest rates typical for various credit score ranges. Please remember that these numbers are median estimates provided for general guidance. They should not be taken as precise rates for everyone in each credit score category. Actual interest rates differ due to lender-specific policies, prevailing market conditions and unique borrower profiles.

Pros and Cons of Personal Loans in California

Personal loans offer lower interest rates than credit cards, the convenience of consolidating multiple debts into a single payment and provide quick access to funds for various personal needs. However, it is important to consider that personal loans are not without risks, such as potential origination fees or the jeopardy of assets in secured loans.

Thorough research is essential for a comprehensive understanding of personal loan benefits and drawbacks.

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FAQ About Personal Loans in Kentucky

If you have questions about personal loans, MoneyGeek has answers to help you make an informed decision before applying.

According to MoneyGeek, First Tech is the best lender in Kentucky for personal loans, with a MoneyGeek score of 97. Its average APR is 12%.

In Kentucky, personal loans are available from online lenders, banks and credit unions. For local access and in-person services, Commonwealth Credit Union, Greater Kentucky Credit Union and Service One Credit Union are notable credit unions offering personal loans.

PenFed offers the best personal loan interest rates in Kentucky, according to MoneyGeek, with the lowest APR starting at 7.99%. Keep in mind that the most favorable rate for you could vary based on individual needs and creditworthiness, and securing a low rate generally requires an excellent credit score.

In Kentucky, the use of personal loans typically varies by lender, but funds can generally be used for a range of expenses. You might use personal loans for emergency circumstances, vacation or travel, and home or auto repair. However, they are not usually permitted for college tuition or illegal activity.

When considering personal loans, be cautious of red flags such as high APRs, lack of transparency about the lender, a high frequency of poor consumer reviews and lack of clear information about the credit score impact of the application process.

Yes, lenders do consider your income level when applying for a personal loan, but they also evaluate your debt-to-income ratio, credit score, employment history and credit history. Opening new credit lines during the application can influence the approval outcome.

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The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.

Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about our editorial policies and expert editorial team.