Payday Lenders in Indiana

Payday Loans are Legal in Indiana

Beware of predatory lending

Payday Lenders in Indiana

n Indiana, payday loans serve as a quick solution to sudden financial needs. These loans are often utilized to cover unforeseen expenses or to bridge the gap between paychecks.
In order to get a payday loan in Indiana, borrowers must meet specific criteria outlined by the state’s regulations, but that has not stopped over 1 million loans from being issued per year. Indiana has one of the highest payday loan usage rates in the country with some even taking out more than 10 loans annually despite the average APR being 382% on an average $350 loan. Although the interest rates on these loans can soar into triple digits, they remain a valuable resource for those seeking immediate financial aid.
Borrowers in Indiana should take necessary precautions before taking out payday loans. They must evaluate their financial capacity and ability to repay the loan on time. It’s extremely important to compare lenders’ terms and fees and verify their credentials before entering into any agreement. The state has enacted regulations to protect borrowers against predatory lending practices, and borrowers need to be aware of their rights under the law. By carefully considering their options and making informed decisions, borrowers can avoid falling into the debt trap often associated with payday loans.

Payday Loan Laws

Payday loans are a controversial topic in Indiana, as they often come with high-interest rates and fees that can trap borrowers in a cycle of debt. While payday loans are legal in the state of Indiana, there are laws in place to regulate them. Some of these restrictions include the requirement for payday lenders to be licensed by the state, and they can only lend up to a certain amount. There are also limits on the fees that lenders can charge and restrictions on the number of loans a borrower can take out at once.   

The State of Indiana has several other pieces of legislation that govern payday loans:

Loan Terms and Conditions

Maximum loan amount: $605 or 20% or gross monthly income (whichever is less)

Maximum Interest Rate: No maximum defined in legislation

Minimum loan term: 14 days

Maximum loan term: No maximum defined in legislation

Number of rollovers allowed: None

Finance Charge: $50-$250 – 15%; next $150 – 13%; final $150 – 10%

Legal action: 6 Years

Certified Payday Lenders in Indiana

Company NameCompany scoreLicense Status
Tribal Lending Enterprise, Inc8Valid
CNG Financial Corporation7.6Valid
LDF Holdings, LLC7.5Valid
Advance America, CAsh Advance Centers, Inc.7Valid
Populus Financial Group, Inc.6.5Valid
Kashia SErvices5.8Valid

History of Indiana Payday Loans

In 1973, the state legislature introduced the Consumer Credit Protection Act, which established a usury cap of 72% APR and made charging rates above this limit a felony offense. However, in the 1990s, payday loans began to appear in Indiana. Despite creating the Indiana Department of Financial Institutions in 1993 to regulate the industry, lenders continued to charge exorbitant rates. In 2002, new legislation exempted payday lenders from the 36% APR cap, effectively allowing them to charge whatever rates they wanted, and the industry continued to flourish in Indiana. Today, payday lending is regulated by Code Ann. § 24-4.5-7-101 et seq., but numerous bills aimed at capping APRs and restricting loan terms have failed to pass in the state legislature. Despite these efforts, payday lenders continue to thrive in Indiana.

How to file a complaint

Borrowers can file a complaint with the Indiana Department of Finance Institution using their website. Complaints can be filed against any licensed lender in the state, but they cannot pursue complaints that have a legal action pending. If a lender is not licensed or chartered, there are other resources available for borrowers to file a complaint.

Types of Quick Loans in Indiana

How to Get out of Payday Loan Debt?

Managing repayment of a payday loan can be overwhelming, but there are alternatives available. The first step is to contact the lender and discuss the situation. Borrowers could potentially negotiate a repayment plan that includes reducing the amount owed, extending the payment period, and lowering the interest rate. Refinancing the loan with a lower interest rate is another possibility that may help manage payments more effectively. As a last resort, filing for bankruptcy can result in the loan being discharged. However, this should only be contemplated after seeking advice from a lawyer.

Types of Quick Loans in Indiana

Alternatives to Payday Loans in Indiana

Personal Loans

Personal loans are a type of unsecured loan that can be used for any number of purposes at the borrower's discretion. Borrowers can obtain personal loans from banks, credit unions, and online providers. The interest rates and fees depend on the lender but are typically lower than credit cards or payday loans. Personal loans can be an excellent option for those who need a lump sum of cash upfront and prefer a fixed repayment schedule.

Construction Loans

Construction loans are used to help finance new construction projects or major renovations for existing homes. They are usually short-term loans that are repaid in a lump sum once the project is complete. In Indiana, construction loans may require a down payment of at least 20%, and the loan amount is typically based on the property's appraised value after the project is completed. Before taking out a construction loan, it's essential to have a solid plan in place and ensure that you can make the payments on time.

Home Equity Loans

Home equity loans allow homeowners to borrow against the equity they've built in their homes. In Indiana, home equity loans are available from banks and credit unions and are typically used for home improvements, debt consolidation, or other major expenses. Home equity loans usually have lower interest rates than a lot of other types of loans because they are secured by a piece of property. In Indiana, the maximum amount that can be borrowed for a home equity loan is 80% of the home's value minus any outstanding mortgage balance.

Bad Credit Loans in Indiana

Bad credit loans are designed to help people with poor credit scores access funds when needed. Since the risk the lender is taking is higher than most personal loans, they tend to have higher interest rates and fees. However, they can be a viable option for those who need cash quickly and cannot obtain traditional loans.

Indiana Small Business Loans

Small business loan options in Indiana:

  • SBA loans: The SBA offers several loan programs for small businesses, including 7(a) loans, microloans, and disaster loans.
  • Community Development Financial Institutions (CDFIs): These organizations provide loans and other financial services to small businesses in underserved communities.
  • Credit union loans: Credit unions may offer small business loans with lower interest rates and more flexible repayment terms.
  • Regional Economic Development Organizations (REDOs): This organization offers loans, grants, and other financial resources to small businesses in their respective regions of Indiana.
  • Indiana Finance Authority (IFA): The IFA offers loan programs, loan guarantees, and tax-exempt bond financing to businesses in Indiana.

VA loans in Indiana

VA loans are offered to eligible veterans, active-duty service members, and their spouses to help purchase a home. They are unique to other mortgage loans because they are backed by the Department of Veterans Affairs (VA), meaning that lenders are protected against loss if the borrower defaults. VA loans usually offer more favorable terms than traditional mortgages, including lower interest rates, no down payment requirements, and no private mortgage insurance (PMI) requirements. To qualify for a VA loan in Indiana, borrowers must meet eligibility requirements, including minimum credit score and service requirements. VA loans are a great option for eligible veterans and service members who want to become homeowners.

Indiana Student Loans

Many options are available to Indiana students to help finance their college education. These options include:

  • Federal Student Loans: The U.S. Department of Education offers several federal student loan programs, including Direct Subsidized and Unsubsidized Loans, Parent PLUS Loans, and Graduate PLUS Loans.
  • Indiana Secondary Market for Education Loans (ISM): ISM offers private student loans to Indiana residents with competitive interest rates and flexible repayment terms.
  • Indiana National Guard Supplemental Grant: This grant provides up to $2,000 per year to Indiana residents who are members of the Indiana National Guard and attend an eligible Indiana college or university.
  • Vocational Rehabilitation Supplemental Grant: This grant provides up to $1,000 per year to Indiana residents who have a disability and are pursuing a degree at an eligible Indiana college or university.
  • Private Student Loans: Private lenders, such as banks and online lenders, offer student loans with varying interest rates and repayment terms.

Indiana Income Information

The recently released 2021 U.S. Census reports show Indiana having a median household income of $61,944, somewhat lower than the national median of $70,717. Indiana’s economy is heavily dependent on manufacturing, with industries such as transportation equipment, machinery, and chemicals being major contributors. The state has also seen growth in the healthcare and education sectors in recent years, providing a more diverse economic landscape. Indiana’s median household income varies widely by county, with Hamilton County being the highest at $98,880, just above the national average, and Crawford County is the lowest at $41,761. The state’s poverty rate was 12.2% in 2021.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on April 21, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: Indiana. Accessed on April 21, 2023.

Indiana Payday Lender Complaints

Below are trends associated with some payday lenders in Indiana, as reported to the Consumer Financial Protection Bureau.
Company Name Count
Tribal Lending Enterprise, Inc 10
CNG Financial Corporation 8
LDF Holdings, LLC 7
Advance America, CAsh Advance Centers, Inc. 7
Populus Financial Group, Inc. (F/K/A Ace Cash Express) 5
Kashia SErvices 4
Total Complaints 130

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on April 21, 2023.

Most Common Issues

Complaint type Count
Unexpected fees or interest 44
Struggling to pay loan 23
Can’t contact lender 13
Received a loan didn’t apply for 11
Can’t stop withdrawal from bank account 8

What are the main reasons residents of Indiana apply for payday cash advance online or offline

Payday loans are typically used for nonnegotiable everyday expenses like your rent, utilities, and groceries. Per data reported by Pewtrust, the percentage of reasons described below

Reason Share
Regular Expenses (Utilities, car payment) 53%
Unexpected emergency/expense 16%
Rent/Mortgage 10%
Something Special 8%
Other 5%
Did not answer 2%

Payday Lenders by City

Frequently Asked Questions

Will applying for a payday loan impact my credit?

Payday loans are typically not reported to the three major credit reporting agencies, and most lenders do not conduct credit checks as part of their application process.

What do I need to apply for a payday loan?

To apply for a payday loan in Indiana, you will need to provide proof of income, contact and banking information, and a valid government-issued ID.

Can I cancel my payday loan?

You cancel your payday loan by paying back the lender in cash, certified check, authorized account debit, cashier’s check, money order, or credit/debit card, prior to the close of business on the next day.

Can a payday loan lender garnish my wages?

Payday lenders are generally not permitted to garnish wages in Indiana, except in rare cases where a court has issued a judgment against the borrower and ordered wage garnishment as a means of collecting the debt.

Can spouses have separate loans?

Yes, spouses can have separate loans in Indiana. Each individual can apply for a loan based on their own creditworthiness and financial situation, and the loan will be in their own name.

When will I receive my funds if I am approved for a payday loan?

If you are approved for a payday loan in Indiana, you can typically receive your funds on the same day or the next business day, depending on the lender’s policies and the time of day your application is approved.

What happens if I can’t repay my payday loan on time?

Defaulting on a payday loan in Indiana may result in additional fees and interest charges, debt collection attempts, legal action, and in rare cases, serious consequences such as wage garnishment.

When could I apply for another payday loan?

In Indiana, you can apply for another payday loan as soon as you pay off your previous loan unless it is your sixth loan with any lender. Then you must wait 7 days.
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