Like many other states, Indiana has also enacted several legal regulations regarding short-term payday cash advancing. As per Indiana payday loan laws, this type of lending is legal in the state and there are virtually no restrictions on which type of organization can offer these loans. It can be a bank or just any other financial institution, such as check cashing agencies. The loans are advertised as a financial help for those who have to meet some urgent financial requirements but do not have funds in their bank account. The date for the repayment is often the next payday when the borrower gets his monthly salary. Following are some of the specific provisions applicable in this state regarding short-term cash advances.
Maximum Limit Of The Loan Amount
In Indiana, the maximum amount of loan that can be issued as part of these programs should not be higher than $550; the minimum can be as low as $50. Indiana payday loan laws also impose a further restriction, as per which, the maximum amount you borrow should not be more than 20% of your gross monthly income. It means if you are a salaried individual with a monthly salary of $2000, the lenders should not offer you a loan higher than $400. This way, the maximum loan amount can be either 20% of the borrower’s monthly income or $550, whichever is less.
Rates And Fees
The laws in this state have not provided much relief to the borrowers, as the lenders are allowed to charge a fee of $15 for every $100 of cash advance. It means if you take a loan of $400, you will have to pay $60 as fees, which equals to an APR of 360% for a period of 15 days. It is also important to note that several other charges can also be applicable, as Indiana payday loan laws do not say anything specific about the same.
Maximum Number Of Loans
In Indiana, you are allowed to borrow just one loan from one lender at a time. It means if you need, you can borrow another loan at the same time from another lender. The maximum number of loans that you can take in this state however should not be more than two. Besides that, you can qualify for another loan in only those cases, where you do not utilize the full quota of 20% of your gross monthly income through one loan. The total amount should never exceed this 20% limit. There is however no limit on how many payday loans can be given to a single borrower within a year.
Provisions Regarding Consecutive Loans
Though there are virtually no limits on the number of loans you can borrow per year, Indiana payday loan laws have imposed certain restrictions applicable regarding consecutive loans. An individual borrower can take 6 consecutive loans, but only after paying off the previous payday debt. After all, the maximum number of loans at a time should not be more than two in any case within the state. Once you utilize your quota of 6 consecutive loans, there is an eight days of cool-off period, during which you cannot be approved for another cash advance.
Overall, Indiana payday loan laws are not favorable to the borrowers. As one can see it clearly, no serious attempts have been made to discourage the unusually high-rate lending. The laws also do not say anything about the rollover of the loans if the repayments are not made in time. Therefore, it is entirely up to the borrower to safeguard his/her interest by being very careful before taking these attractive yet risky “easy” loans. For information on relief from payday loans click here.
