Indiana Payday Loan Laws and Protections

How Payday Loans Work in Indiana

Indiana groups this type of short-term credit with its small-loan products. A customer is given an advance and schedules a single payoff. The payoff is the advance plus the charge. A company offering the product normally would need an Indiana license and would come under DFI oversight.

Indiana limits unpaid principal for each customer to $825 across all open small-loan accounts. Each lender can have one open contract with the customer. The statewide database prevents a third loan when two are already open. The principal for a proposed advance cannot be more than 20% of the customer's income before taxes for one month.

Loan Term and Tiered Charges

The three charge caps relate to bits of principal rather than the full loan. The bit between $1 and $250 is capped at 15%. The bit between $250.01 and $400 is capped at 13%. The bit between $400.01 and $825 is capped at 10%. The due date must be on the 14th day or later after funding.

At $825 with the three calculations, the maximum finance charge would be $99.50. This would be $37.50, $19.50, and $42.50. Each charge should be itemized, and the contract should list the amount financed, dollar charge, total payment and APR. Each should be clearly itemized in the contract. Transparency in each charge is more helpful in finding the total borrowing cost when compared to looking at one charge individually.

Cancellation, Partial Payments and Returned Payments

Want to cancel the transaction? Return the principal by the end of the day of the next business day of the lender. There's no charge for a cancellation. Have time stamped evidence that the cancellation was done and the money was returned.

Prior to maturity, the customer can pay any part of the balance for no additional charge. The business must give a signed and dated receipt. A check or electronic debit that is not paid returns a charge of no more than $25. The business may attempt to collect the money without the payment civilly, but may not threaten or initiate a criminal case against the customer because that payment was not made.

Consecutive Loans and Payment Plans

A lender cannot use a separate new small loan to extend, refinance or consolidate an unpaid loan balance. If that lender makes another advance within seven days after the earlier loan is paid off, then it counts as the next loan in a sequence. For the third, fourth and fifth loans in the sequence, that lender must provide an extended payment option. The customer may choose that option after the cancellation period and before defaulting on the loan.

The payment arrangement has no added charge. The customer cannot receive another Indiana small loan until its balance is paid. After making six loans in one sequence to the same customer, the lender must wait seven days before making the next advance. Customers who anticipate payment issues should contact the lender before the payment due date to request details of the payment arrangement.

Consider Less Costly Ways to Cover the Gap

Ask the company you owe whether it can move the due date or split the balance. Then compare emergency assistance, an employer advance, a credit-union loan and nonprofit credit counseling. Review these ways to borrow money quickly by timing, total cost and repayment terms.

Before Borrowing in Indiana

Before providing bank account details or identity information, review the DFI Licenses for the service provider. Review terms that were signed and compare with the information provided in the advertisement, debit authorization, privacy notice and final dollar payment.

Place the payment in the household budget. Paying it would displace expenses for rent, utilities, groceries, transportation, and medicine. In your case, the transaction isn't affordable just because the state puts restrictions on the amount. A request to send money for an immediate release or insurance in the form of a gift card, wire transfer, or cryptocurrency is a scam. This is not a normal loan payment in this situation.

Indiana Payday Loan Laws & Regulations

The following is a summary of Indiana small loans. Longer term installment contracts and other credit products may have different requirements.

The DFI borrower handout is a good reference for a first-party source. You can check a license or complain at the agency’s consumer credit page.

This page's government references and dollar figures were reviewed on September 10, 2026. Always reconfirm the summary because changes to laws or agencies may change the policy.