Payday Loans and Cash Advance in Indiana

Legal, licensed small loans up to $825. Below: the law, the limits, what $300 costs here, who regulates it, and how to request a cash advance online in Indiana.

Is a Cash Advance Legal in Indiana?

Payday loans are legal in Indiana and regulated as small loans under Chapter 7 of the Indiana Uniform Consumer Credit Code, Ind. Code 24-4.5-7. Lenders must be licensed by the Indiana Department of Financial Institutions, and the department's borrower rights pamphlet, which every lender must give you, spells out the current numbers. As of January 1, 2025, the most you can owe on small loans at one time is $825 in principal, a figure that started at $550 in the statute and rises with inflation; it was $715 under the 2023 pamphlet. A loan must run at least 14 days, cannot exceed 20% of your monthly gross income, and cannot be renewed, refinanced or consolidated with another small loan from the same lender. The finance charge is tiered: 15% of the first $250, 13% of the portion from $250 to $400, and 10% of the portion from $400 to $825. On a $300 two-week loan that is $44, roughly 382% APR. What a borrower gets in return is a statewide database that enforces the two-loan limit, a next-business-day right to cancel, a mandatory extended payment plan after repeated borrowing, and a ban on criminal prosecution over a bounced check.

The governing law is Indiana Uniform Consumer Credit Code, Chapter 7, Small Loans (Ind. Code 24-4.5-7; fee tiers in 24-4.5-7-201, loan limits in 24-4.5-7-404).

Loan Limits and Terms in Indiana

The tiers stack rather than replace each other, so a $300 loan costs 15% of $250 plus 13% of the next $50, and an $825 loan costs $99.50, the pamphlet's own example. The $825 aggregate counts every small loan you have out, and the law separately bars a lender from lending to anyone who already has two small loans outstanding, so in practice you can hold one loan per lender from at most two lenders. Lenders check a statewide database before funding. A consecutive small loan is one made within seven days after the previous loan is paid off; at the third, fourth and fifth consecutive loan the lender must offer an extended payment plan with no added fees, and after six loans in a row with one lender a seven-day cooling-off period applies. Nothing sets a maximum term, only the 14-day minimum.

What a $300 Loan Costs in Indiana

Ind. Code 24-4.5-7-201 caps the finance charge at 15% of the first $250 and 13% of the amount from $250 to $400. For $300: 0.15 x 250 = $37.50, plus 0.13 x 50 = $6.50, for a $44 fee, the same figure the Department of Financial Institutions uses in its pamphlet. Over the 14-day minimum term: APR = 44 / 300 x 365 / 14 = 3.82, or about 382%. The borrower repays $344. No other charges are allowed except a single $25 fee if the check or debit is dishonored.

Run your own numbers with the cash advance calculator.

Consumer Protections and Who to Call in Indiana

• Small loan lenders must be licensed and examined by the Indiana Department of Financial Institutions, must give you the department's borrower rights pamphlet, and must provide a written agreement signed by both sides with a duplicate original for you.
• The finance charge is capped at 15% of the first $250, 13% of the next $150 and 10% of the amount from $400 to $825; the only other charge allowed is one $25 fee for a dishonored check or debit (Ind. Code 24-4.5-7-201).
• You may cancel a small loan at no cost until the close of business on the next day the lender is open by repaying the amount advanced in cash, certified check, cashier's check, money order or an authorized account debit.
• A lender may not lend you more than 20% of your monthly gross income, may hold only one loan agreement with you at a time, and may not lend to anyone with two small loans already outstanding, checked against the statewide database (Ind. Code 24-4.5-7-404).
• At your third, fourth or fifth consecutive loan the lender must offer an extended payment plan with no additional fees, and after six loans in a row with one lender a seven-day cooling-off period applies before you can borrow again.
• The lender may not threaten or begin criminal proceedings over a returned check, may take only one check or debit authorization as security, may not ask for your PIN, and must accept partial payments at any time without charge.
• Active-duty service members and their dependents are covered by the federal Military Lending Act, which caps the military annual percentage rate on payday loans at 36%.

Complaints and licence checks go to the Indiana Department of Financial Institutions: 800-382-4880, www.in.gov/dfi, or file a complaint at the regulator's complaint page. The federal CFPB also takes complaints about any lender.

Online vs Storefront Lenders in Indiana

An online lender making small loans to Indiana residents needs the same Department of Financial Institutions license as a storefront and must run the same statewide database check before funding, so the $825 aggregate cap and two-loan limit apply on a website exactly as they do at a counter. The department offers an online license lookup; use it before handing over bank details, because a lender that is not licensed in Indiana is not bound to the fee tiers, the cancellation right or the extended payment plan, and the department cannot examine it. Out-of-state and tribal-affiliated websites do lend into Indiana at rates well above the statutory tiers; the department takes complaints about the lenders it licenses at 800-382-4880 or [email protected], and the Consumer Financial Protection Bureau accepts complaints about the rest. Two quick checks catch most problems: the Truth in Lending disclosure should show a finance charge that matches the tiers, and the contract should name a lender you can find in the Indiana license database.

Alternatives If a Payday Loan Is Not the Right Fit

Indiana's own pamphlet lists the alternatives it wants borrowers to weigh first: cheaper short-term financing from another financial institution, help from family or friends, a cash advance on a credit card, an overdraft protection account, or a loan repayable over several months. That last option is the main legal one: consumer installment loans from lenders licensed under the other chapters of the Indiana Uniform Consumer Credit Code spread repayment across months instead of demanding it all on one payday. Credit unions can offer payday alternative loans under federal rules, and many Indiana banks and credit unions write small personal loans for existing customers. If you are already in a cycle of small loans, use the rules you are entitled to: request the extended payment plan at your third consecutive loan, which adds no fees, and remember that partial payments are allowed at any time without charge. Employer pay advances and payment plans with the creditor you owe cost less than another $44 fee.

Compare the installment loan and payday alternative loan options before you decide.

Cities We Cover in Indiana

• South Bend, INLocal cost of living, ordinances and help lines

Frequently Asked Questions

Nearby States

• MichiganThe fee cap, a worked example and the regulator to call in Michigan.
• OhioThe fee cap, a worked example and the regulator to call in Ohio.
• KentuckyThe fee cap, a worked example and the regulator to call in Kentucky.
• IllinoisThe fee cap, a worked example and the regulator to call in Illinois.