What a payday loan costs — before Indiana’s rules
A payday loan typically costs $15–$20 per $100 borrowed for a two-week term — roughly 400% APR — and is due as a single lump sum on your next payday. That single-payment structure, not the fee on any one loan, is the trap: most fees come from borrowers who cannot clear the balance in one go and roll it over. Where a state caps rates below payday levels, licensed payday lending disappears and a loan above the cap is generally void — not legally collectible, whatever the contract says.
The law in Indiana
- Rate cap
- No 36% cap. Payday loans are allowed under a tiered fee schedule (15% of the first $250, down to 10% over $400) plus a $33.50 database fee; loans capped at $605.
- Key law
- Indiana Uniform Consumer Credit Code, Small Loans (IC 24-4.5-7); overseen by the Department of Financial Institutions.
- Enforcement
- No major recent state action verified; Indiana borrowers filed Western Sky complaints around 2013, and multiple federal rent-a-tribe class actions have been brought here (e.g., against Northern Star Lending and Wahido/River Valley).
Indiana caps payday loans at $605 with a tiered fee structure, yet tribal lenders reportedly charge APRs over 700% by claiming exemption — and the state is a hotspot for rent-a-tribe class actions.
What it means for a Indiana borrower
Licensed payday loans are legal, and tribal lenders operate claiming immunity from the fee caps, with many charging APRs over 700%. Indiana is a frequent venue for rent-a-tribe RICO suits.
Before you borrow in Indiana
- File a complaint with the Indiana Department of Financial Institutions.
- Confirm licensing — an unlicensed over-cap loan may be uncollectible.
Cheaper first — try these before a payday loan in Indiana
Payday Loans and tribal lenders in Indiana
Many online lenders that market payday loans to Indiana residents are tribal lenders arguing their sovereignty places them outside state rate caps — a separate legal question this site tracks in depth. For which tribal brands lend to Indiana residents and how state law applies to them, see the Indiana tribal-lending page.
Tribal loans in Indiana →Frequently asked questions
Are payday loans legal in Indiana?
In Indiana, payday-style loans are legal and enforceable, commonly at around 400% APR. The speed is real; so is the cost and the rollover trap. Compare the total dollars repaid before you borrow, and try a credit-union alternative first.
What is the maximum payday loan rate in Indiana?
No 36% cap. Payday loans are allowed under a tiered fee schedule (15% of the first $250, down to 10% over $400) plus a $33.50 database fee; loans capped at $605.
What can I do about a payday loan I already have in Indiana?
Indiana allows this lending, so the loan is generally enforceable — but you can still revoke ACH authorization in writing, avoid taking a second loan to cover the first, and file a complaint with the Indiana attorney general or the CFPB if the lender breaks the rules.