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Compare your loan options in Indiana
Be sure you know the laws before you apply.
When you have unplanned expenses and are on a tight budget, a payday loan could be helpful. Payday loans, a type of short-term loan, give you quick access to money when you need it. Read on to find out about the laws in Indiana and everything else you should know about how payday advances work.
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.
Can I get a payday loan in Indiana?
Yes, payday loans are legal in Indiana and are goverened by Indiana Code Ann. 24-4-4.5-7-101 et seq.
Four main guidelines lenders in Indiana must abide by:
- Maximum Loan Amount: $550 or 20% of your gross monthly income, whichever is less
- Minimum Loan Term: 14 days
- Maximum Loan Term: None
- APR: 14-day $100 loan is 390%
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:
- $50 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.
New regulations in the future
SB-245, which would have raised the minimum amount available to borrow, didn’t pass into the Indiana Senate meetings.Most recently, SB-325 proposed to create a new provision which would allow lenders to extend loans between $605 and $1,500 to borrowers. These loans would have lasted between three to twelve months and would have had interest rates as high as 222%. Borrowers would have been unable to take out more than one extended payday loan at a time, and lenders could only charge payments less than 20% of a borrower’s gross monthly income. However, this bill wasn’t seen by the senate and won’t be put in place in the near future.
Although payday loans are high-cost alternatives to regular loans, they do provide help specifically to people with bad credit. If you think there could be improvements — like lower interest rates — contact your local representative and speak your mind.
What will I need to apply?
Eligibility criteria varies between lenders, but you will need to be at least 18 years old, a US citizen or permanent resident and have a regular source of income before applying.
Lenders may need your Social Security number and details about your employment/income in order to process your application. If you apply online, lenders usually need access to your checking account in order to deposit your loan and debit your payments.
3 alternatives to payday loans in Indiana
A payday loan can be a good way to cover the gaps in your budget when an emergency crops up, but because these are high-cost loans, you’ll need to have a solid plan of repayment before you apply.
- Local government assistance. If you have trouble paying for your energy or food costs, you should contact the Low Income Energy Assistance Program or the Community Harvest Food Bank. More information on these and other alternatives can be found here.
- Credit card cash advance. You could withdraw cash from your existing credit card‘s limit. When you withdraw cash from your credit card at an ATM, you’ll be notified of the cash advance fee at that time. It’ll likely be costly, but may be less than the cost of a payday loan.
- Make extra money on the side.Consider a side gig like driving for Uber or taking surveys online to make some extra cash during your spare hours. Although it might not have as high of an hourly rate as your main job, it could provide you with enough funds to avoid a payday loan.
I had a payday loan about 6 months ago I haven’t paid it all off yet and I was needing help for bills after Christmas. Am I able to get another payday loan through a different company?
Hi Brittany,
Thanks for getting in touch with finder. I hope all is well with you. :)
Yes, you may still be qualified to get a payday loan from another company. However, you would need to meet their eligibility requirements. If you can prove to them that you can still make the repayments even if you have existing loans, then your application might be approved.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
I would like to know if these payday loans are legal in Indiana: Spotloan, Dash of Cash, Plain Green, Evergreen services, Loan at last and Big Picture Loans?
Hi Lp,
Thanks for getting in touch with Finder, a leading comparison website, and general information service.
Yes, payday loans are legal in Indiana and are governed by Indiana Code Ann. 24-4-4.5-7-101 et seq. For more information about the legality of this, you can click the link above. You can also compare your options for a payday loan there.
Hope this helps!
I live in Indiana, I have to online payday loans one thru American Web and the other Inbox Loans. Neither one is licensed in Indiana. Somebody told these loans may not be legal or binding in Indiana. I haven’t even made first payment on them, because I had to stop payment on them, because another payday loan went thru my account causing me to be negative in my account. I’m stressing out, can someone please help me with this.
Hi Debbie,
Thank you for your inquiry.
Should you need a reference to check whether a payday loan lender is legit or not, we have a review page entitled, “Get a legit payday loan with no credit check.”
I hope this information has helped.
Cheers,
Harold