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. Check a lender’s license there before you share bank details; how to tell if a lender is legitimate lists the other checks.

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.

Federal law requires the lender to state the finance charge in dollars and the APR in your agreement. Read both before you sign, and set them beside the example further down this page.

A loan that meets the Northlight standard

Northlight works only with loans that carry an APR of 35.99% or less, fees included, and give you at least 3 months to repay. A single-payment payday loan under Indiana law does not meet that standard, whatever its fee, because it falls due in one payment within weeks.

For example, $1,000 repaid over 12 months at 35.99% APR is 12 payments of $100.46, or $1,205.52 in total. The calculator prices other amounts and terms.

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.