Payday Loans in Indiana: Laws, Costs, and Your Options (2026)

Payday loans in Indiana are legal and licensed under the state’s small loan law, IC 37-3 (IC 24-4.5-7 before July 1, 2026). You can owe a lender no more than $825 at a time, the loan cannot exceed 20% of your monthly gross income, the finance charge tops out at $99.50, and the term must be at least 14 days. Renewals are banned, and a repeat borrower is entitled to an extended payment plan at no extra cost. This page covers what the law allows, what a loan costs, your rights, and which of the lenders we review serve Indiana. For how Indiana compares with every other state, see payday loan laws by state.

Indiana payday loan rules at a glance

Rule	Indiana
Legal status	Permitted, through a DFI-licensed small loan lender (IC 37-3)
Regulator	Department of Financial Institutions (DFI), (800) 382-4880
Maximum loan	$825 outstanding with one lender, and no more than 20% of monthly gross income
Loans at a time	One per lender; none if you already have two or more small loans outstanding
Finance charge cap	15% of the first $250, 13% of $250 to $400, 10% of $400 to $825; $99.50 on $825
Other charges	None allowed, including a fee to cash the lender’s check
Minimum term	14 days
Renewals	Banned, along with refinancing and consolidation
Extended payment plan	Must be offered at the 3rd, 4th, and 5th consecutive loan, at no extra cost
Cooling-off period	7 days after six loans in a row with one lender
Loan database	Lender must verify your outstanding small loans before lending (IC 37-3-3-8)
Right to cancel	Until close of business on the next day the lender is open
Returned payment	One $25 fee, once; no criminal threats or proceedings
Military borrowers	36% federal MAPR cap under the Military Lending Act

How an Indiana payday loan works

You give the lender one check or one debit authorization for the amount borrowed plus the finance charge. The lender cannot take any other collateral and cannot ask for your PIN. It pays you the money, holds the check or authorization until the due date, at least 14 days out, and then collects in full.

Before lending, the lender must independently verify how many small loans you have outstanding and their total balance, through a verification method the Department of Financial Institutions has approved (IC 37-3-3-8). In practice that is a statewide database of small loans, which is how lenders enforce the two-loan limit, consecutive loans, and the cooling-off period.

You can pay part of the loan early at no charge, and the lender must give you a receipt. You cannot extend the loan by paying only the fee: Indiana bars renewals, refinancing, and consolidation outright.

What a payday loan costs in Indiana

The charge is set by tiers, so it falls a little as a share of larger loans. Figures from the DFI’s small loan brochure, with the APR on a 14-day loan:

Loan amount	Maximum finance charge	APR over 14 days
$200	$30	About 391%
$300	$44	About 382%
$825	$99.50	About 314%

The APR column is our own arithmetic, not a quote; your Truth in Lending disclosure states the actual APR. A longer term lowers the APR but not the dollar charge.

The cost that adds up is repetition. Indiana counts a new loan taken within seven days of paying off the last one as a consecutive loan. Six $825 loans in a row with one lender would cost $597 in finance charges, which is why the law forces a payment plan offer and then a break.

Consecutive loans, payment plans, and the cooling-off period

• Extended payment plan. When you take a third, fourth, or fifth consecutive loan, the lender must offer you an extended payment plan, and it cannot charge you for it. Once you enter a plan, no lender can make you a new small loan until the plan is paid.
• Cooling-off period. After six loans in a row with one lender (an initial loan plus five consecutive ones), you must wait seven days before that lender can lend to you again.

If your check or debit is returned unpaid, the lender can charge a $25 returned-item fee, and only once. It cannot threaten you with criminal prosecution or bring criminal proceedings.

Your rights at the counter

1. A licensed lender. Confirm the license with the DFI at (800) 382-4880.
2. A capped loan and a capped charge. No more than $825 outstanding, no more than 20% of your monthly gross income, and no more than the tiered charge above, with no other fees.
3. At least 14 days. No renewals, refinancing, or consolidation.
4. Next-day cancellation. Return the amount advanced by the close of business on the next day the lender is open and the loan is canceled.
5. Partial payments at no charge. Pay down the loan early at no charge, with a receipt each time.
6. The federal Truth in Lending box. The APR, finance charge, amount financed, and total of payments must be disclosed before you sign.

What happens if you cannot repay

If this is your third, fourth, or fifth consecutive loan, ask for the extended payment plan before the due date. Otherwise, call the lender before it presents your check. Read what happens if you default on a payday loan for how collection works, and how to escape the payday loan cycle if one loan keeps leading to the next. If the real problem is a bill you cannot cover, start with what to do when you can’t make this month’s payment. To complain about a lender, email [email protected] or use the form at in.gov/dfi.

Alternatives worth trying first in Indiana

Several routes usually cost less than an Indiana payday loan, roughly cheapest first:

Option	What it costs	The catch
Payment plan on the bill itself	Often nothing	You have to ask before the due date
211 referral to rent, utility, or food help	Nothing	What is funded varies by area
Federal credit union PAL I	Up to 28% APR plus an application fee of up to $20; $200 to $1,000, 1–6 months	One month of membership first; one PAL at a time
Federal credit union PAL II	The same caps; up to $2,000, 1–12 months	Not every federal credit union offers one
Indiana payday loan	Up to $99.50 on $825 for a term of at least 14 days: $30 on $200 (above)	Repeat loans pile up; no renewals, and a cooling-off period after six in a row

The credit union limits come from federal regulation (12 CFR 701.21(c)(7)): no more than three PALs in six months, and no rollovers. Call 211 to reach the local referral line. Employer pay advances and earned-wage apps cost more than their small fees suggest; payday loan alternatives that actually work has the numbers for each option. If an installment loan is on the table, installment loans vs. payday loans explains how to compare total cost.

If you do borrow, borrow the smallest amount, take the longest term offered, and confirm the lender’s DFI license before you sign.