Payday loans in Indiana

Are payday loans legal in Indiana?

Payday loans are legal in Indiana. A licensed lender may lend up to $550 and charge no more than 15% of the loan amount for less than $250.

The governing law is Ind. Code §§ 24-4-4.5-7-101 et seq. and 750 Ind. Admin. Code 1-1-1. Indiana Department of Financial Institutions licenses lenders and takes complaints.

Loan limits in Indiana

• Loan size: up to $550
• Loan term: Minimum of 14 days
• Loans at one time: no lender may permit a person to become obligated under more than one (1) loan agreement with the lender at any time.
• Rollovers: None.
• Cooling-off period: If five (5) consecutive small loans have been made to a borrower after the borrower’s initial small loan, another small loan may not be made to that borrower within…
• Repayment plan: After 3 consecutive loans, lender must offer an extended payment plan of at least four equal installments over at least 60 days at no additional cost.

What a payday loan costs in Indiana

State law sets the price rule: 15% of the loan amount for less than $250.

On a $100 loan repaid after 14 days, the most a lender may charge is $15. You would repay $115, an APR of 391%. For comparison, most credit cards charge between 20% and 30% APR.

Before you deal with an online lender

1. Look the company up with Indiana Department of Financial Institutions. No license, no loan.
2. Never pay a fee up front to get a loan. That is the mark of an advance-fee scam.
3. Read the agreement for the finance charge, the APR and the due date before you give out bank details.

If you cannot repay a loan in Indiana

Contact the lender before the due date and ask for a payment plan in writing. The state rule: After 3 consecutive loans, lender must offer an extended payment plan of at least four equal installments over at least 60 days at no additional cost. If a lender or collector breaks the rules, file a complaint with Indiana Department of Financial Institutions and with the CFPB. Our guide to what happens if you don’t pay covers each step.

Lower-cost options in Indiana

• Credit union payday alternative loans (PALs): $200 to $2,000 at no more than 28% APR.
• A payment plan with the landlord, utility or hospital you owe often costs nothing.
• Local assistance: dial 211 for rent, utility and food programs near you.

See all payday loan alternatives or work out a loan’s price with the cost calculator.