Payday Loans

Indiana Payday Loan Laws

Whether you are considering borrowing a short-term cash advance or are already caught in the viscous cycle of payday debt, if you are a resident of the state of Indiana, you must have a thorough understanding about your legal rights and options under Indiana payday loan laws. Like most other states, Indiana has also enacted plenty of laws to regulate this type of lending practices that are often referred to as predatory lending. Payday lenders are usually very aggressive when it comes to debt collection. Most of the times, they try to take advantage of the ignorance of consumers. Those borrowers who are going through a very serious financial crisis and are unable to pay off the debt in full eventually have to suffer a lot. It is very important for you to note that inability to repay a payday loan is not a criminal offence and nobody is going to put you into jail for this. Besides that, since the Fair Debt Collection Practices Act is applicable in Indiana also, you have the legal right not to be harassed by payday lenders in any manner regardless of how much you owe to them.

No Criminal Action Can Be Taken Against The Borrower

As per the Indiana payday loan laws, payday lenders cannot file criminal lawsuit against the borrowers who are not repaying the loan in full. They can however file a civil suit; some possible consequences of which may include a forced bankruptcy (in the most extreme situation), wage garnishment or any other such thing. The final judgment is entirely up to the court. Lenders have no right to garnish your wages or to force you in any manner to make the repayment unless there is a court order in place.

Collection Fees

NSF fee can be charged only one time and the amount must not exceed $20. Some additional charges may also be applicable if there is any such specific clause already disclosed in the loan contract.

Repayment Plan

It is legally mandatory for the payday lenders to offer an easy repayment plan to the borrowers if they are unable to make the repayment in full after three consecutive loans. The repayment plan must allow the borrowers to pay off the entire debt in at least four equal installments. The most important thing here to note is that the repayment plan must not include any additional interest or finance charges.

Cooling-Off Period

As per the Indiana payday loan laws, if a borrower has already taken six consecutive loans, the lender must wait for at least seven days before approving another cash advance to him or her.

Rollover Is Not Allowed

Failing to meet the deadline for the repayment does not result in automatic rollover or renewal of loan in the state of Indiana. Rollovers, renewals, or refinances are strictly prohibited. It means the only option that is available for the lender is either to wait for the borrower to make the repayment while the account will remain in collection status (no further charges will be added for that wait period) or offer the borrower an affordable repayment plan in easy installments.

Maximum Number Of Cash Advances That Can Be Issued To A Single Borrower

The maximum limit in this regard is one loan per lender. A total of two loans can be issued. It means you can borrow two cash advances at a time from two separate lenders.

Rates And Finance Charges

Indiana payday loan laws have not done much reduce the interest rates or finance charges. It is perfectly okay for the payday lenders to charge a triple digit APR, which is 390% for a $100 of Indiana payday loan issued for a 14-day period. The maximum finance charge that lenders can charge is $15. They can charge interest at 10% on $401-$550, 13% on $251-$400, and 15% on $0-$250.

Minimum Repayment Period

The repayment period for any payday loan issued to any resident of the state of Indiana must not be less than 14 days.

Maximum Amount Of Loan

As per Indiana payday loan laws, the maximum loan amount that can be issued is $550. In any case, the total loan amount must not exceed twenty percent of the monthly gross income of the borrower.

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