Indiana Payday Loans

There are times in life where you might need a loan to get you through an emergency. In Indiana,  you’ll be able to borrow up to $550, but first, you’ll need to know the regulations lenders must follow. So you can avoid falling into a debt cycle.

Are payday loans legal in Indiana?

Yes, payday loans are legal in Indiana. As such, Indiana payday loan companies have rules they must follow. It means that companies must obtain a license for every location they operate. There are rules regarding interest rates, max loan amounts, and so on. In the case of Indiana payday loan companies, loans can only be up to 20% of a person’s monthly income or up to $55o.

Rates, terms and fees for Indiana

Loan amounts: The maximum loan amount for Illinois Residents is $850.00 and or up to 25 percent of the gross income. Based on your income and other factors, loan limits will be determined on an individual basis.

Loan term: Minimum 13 Days – Maximum 45 Days.

Permitted fees: $15.50 per $100 borrowed. The finance charge is considered fully earned as of the date on which the loan is made. The APR will vary depending on the length of your loan.

Cooling off period: A 7-day ‘cooling-off’ period will be instituted after your loan is paid in full if you have had 2 previous consecutive loans outstanding in the last 45 days. Consecutive loans are separated by 7 or fewer calendar days. You will not be allowed to contract for a new loan during this period.

Costs to consider

Indiana law does allow for financing charges for specific loan amounts. These charges stack depending on how much you borrow based on the percentage rates listed below:

  • $0 to $250: 15% of loan amount
  • $251 to $400: 13% of loan amount
  • $401 to $500: 10% of loan amount

These percentages apply separately to the amounts you borrow. If you take out $300, the first $250 will be charged a 15% interest rate and the remaining $50 will be charged a 13% rate, and so on. This is to prevent lenders from charging extremely high fees for borrowing money.

Lenders may charge a $25 non-sufficient funds (NSF) fee if they unsuccessfully attempt to withdraw funds from your bank account. You can pay this fee via check or a lender may attempt to debit your checking account up to three times.

Alternatives to Indiana payday loans

A payday loan can be a good way to cover the gaps in your budget when an emergency crops up. However, these are high-cost loans, you’ll need to make sure to have a solid plan of repayment before you apply.

If you’re in need of extra money, an alternative could be to get a second job or side job for that extra source of income. Although it may not be as high of an hourly rate as your main job, it could provide you with enough fund to avoid a payday loan. Or if you’re ready to give up your free time, you could start a savings plan to help save up enough in advance for unexpected future emergencies.