Payday loan laws in Indiana

Are payday loans legal in Indiana?

Yes — payday loans are legal in Indiana. State law licenses lenders and caps what they may charge: the ceiling is 15% on first $250, 13% on $250-$400, 10% on $400-$550. Any offer above these limits is being made outside the law, no matter where the lender is based.

Legality is a licensing question: a storefront or website may serve Indiana residents only if it holds the Indiana license and keeps every charge inside the statutory schedule — Ind. Code § 24-4.5-7-101 et seq..

How much a payday loan can cost in Indiana

The statutory ceiling is 15% on first $250, 13% on $250-$400, 10% on $400-$550. On a standard $300 loan that works out to about $44 in finance charges — $344 repaid at term, roughly 382% APR. A two-week $15-per-$100 fee equals about 391% APR, which is why the APR column looks the way it does even in “cheap” states.

Cost is capped, not quoted: a lender may charge less than the ceiling, never more. Compare total repaid, not the headline note rate.

Loan terms, rollovers and the one-loan rule

The statutory term is 14-31 days. On renewals: forbidden. Borrowers who cannot repay must be offered an Extended Payment Plan of at least four installments over 60+ days (IC 24-4.5-7-401). Two small loans outstanding at most (one per lender), a $715 combined cap, and no loan above 20% of gross monthly income. Where a statewide database exists, it is what makes these limits enforceable in real time — the lender queries it before every loan.

Online payday loans in Indiana

Any lender serving Indiana residents online must hold the same state license and obey the same caps as a storefront. A license from another state, a tribal charter or an offshore registration does not exempt an internet lender from Indiana law — an offer above the state ceiling is illegal here and worth reporting.

Verify the license before you sign at www.in.gov — search the lender’s exact legal name. If it is not licensed, the loan is being made illegally and the regulator’s complaint desk is the right destination.

Who regulates payday lending in Indiana?

The Indiana Department of Financial Institutions licenses lenders, publishes the fee schedule and takes complaints from borrowers.

1. Keep the loan agreement, every fee disclosure and your payment history.
2. File a complaint with the Indiana Department of Financial Institutions (www.in.gov) — describe the charge or practice and attach the documents.
3. If the lender turns out to be unlicensed or the complaint stalls, escalate to the Indiana Attorney General and the CFPB complaint portal.

Your rights as a borrower in Indiana

• Right of rescission. End of next business day — return the proceeds and walk away at no cost.
• Full disclosure. The lender must state the APR and the total of payments before you sign; a missing disclosure is itself a violation.
• No criminal exposure for default. An unpaid loan is a civil debt — arrest threats are an illegal collection tactic.
• Payment-plan right. In nearly every licensing state you can demand an extended payment plan instead of a rollover — ask for it in writing.

Legal alternatives in Indiana

federal credit-union payday-alternative loans (PALs, APR-capped at 28%), installment loans from state-licensed lenders, employer salary advances and local assistance programs — all cheaper than rolling a payday note.

Questions about Indiana payday loan laws