Payday allowed

Borrowing in Indiana: What State Law Allows

Indiana permits short-term small loans with capped fees that still work out to triple-digit APRs. Here are the limits, the free payment plan you can ask for, and what happens if a debt goes unpaid.

By Lendmira Editorial Team Updated October 13, 2026 6 min read

Small (payday) loans: Allowed, up to $825
Fee on the first $250: 15%
Minimum term: 14 days
Time limit to sue on debt: 6 years

Map of the United States with Indiana highlighted

The short version

Indiana's small loan law allows payday-style loans of up to $825 outstanding with one lender, never more than 20% of your gross monthly income. The finance charge is capped at 15% of the first $250, 13% of the next $150 and 10% of the rest, for a term of at least 14 days, which is an APR of about 314% on an $825 two-week loan. Creditors generally have six years to sue, and garnishment is capped at 25% of disposable pay.

Indiana lending rules at a glance

Payday loans Allowed Up to $825 and 20% of gross monthly income; fee 15% of first $250, 13% to $400, 10% to $825; 14+ days

Car title loans Not available

Rate limit on small loans Supervised loans: 36%/21%/15% tiers or 25% overall, plus a capped prepaid charge

Time limit to sue on a debt 6 years written contract 6 years for credit card debt

Wage garnishment Lesser of 25% of disposable pay or the amount above 30× federal minimum wage

Lender licensing and complaints Indiana Department of Financial Institutions · Look up a lender on NMLS

How Indiana small loans are priced

Payday loans in Indiana are called small loans, and the lenders that make them are licensed by the Department of Financial Institutions (DFI). The finance charge is set in tiers:

Maximum finance charge on an Indiana small loan, and what it means on a 14-day loan
Amount borrowed	Maximum charge	APR over 14 days
$250	$37.50 (15%)	About 391%
$400	$57.00 (15% + 13%)	About 371%
$825	$99.50 (15% + 13% + 10%)	About 314%

The dollar charge is fixed by the tiers, so the APR depends on how long you keep the money. A loan must give you at least 14 days to repay. The only other fee the lender can add is a returned-check charge of up to $25, collected once.

Limits on how often you can borrow

Two at most. A lender can't make you a loan if you already have two or more small loans outstanding.
No renewals. A lender can't renew, refinance or consolidate your small loan with another one of its own.
Consecutive loans count. A new loan within seven days of paying off the last one is consecutive.
A free payment plan. At the third consecutive loan and after, the lender must offer an extended payment plan with no added fees. You can't take another small loan until it's paid off.
A cooling-off period. After six loans in a row with one lender, you must wait seven days before borrowing again.

If you are taking out your third loan in a row, take the payment plan. Better still, look at payday loan alternatives before the first one.

Installment and title loans

Supervised lenders, the licensed finance companies that make larger installment loans, may charge the greater of two limits: tiered rates of 36% a year on the smallest balances, 21% on the middle tier and 15% above that, or a flat 25% a year. The tier boundaries started at $2,000 and $4,000 and are adjusted for inflation. On top of interest, a lender can charge a nonrefundable prepaid finance charge of up to $75, $150 or $200 depending on the loan amount, but not again on a refinance within three months, and no more than twice in 12 months.

Indiana's small loan law doesn't cover car title loans, so a loan secured by your car has to stay within the general consumer loan limits. Use the APR calculator to see what an installment offer really costs with fees included.

Debt time limits and garnishment

A creditor generally has six years to sue. That period applies to written contracts for the payment of money, such as loan agreements, and to accounts and unwritten contracts. Credit card debt falls under six years either way. See how statutes of limitations work before you pay on an old debt.

With a judgment, a creditor can garnish the lesser of 25% of your weekly disposable earnings or the amount above 30 times the federal minimum wage. If you show good cause, a court can lower the 25% limit, though not below 10%. Your employer can charge a processing fee, split between you and the creditor. For your rights with collectors, see debt collectors and your rights.

Complaints and license checks

Look up the lender on DFI's license search before you apply, online or in a store.
Check the math: the finance charge in dollars should match the tiers above for the amount you borrow.
File a complaint with DFI by phone at (800) 382-4880, by email at dficomplaints@dfi.IN.gov or with its complaint form. You can also file with the CFPB.

Common questions

Are payday loans legal in Indiana?

Yes, as small loans from DFI-licensed lenders. You can owe up to $825 to one lender, and no more than 20% of your gross monthly income.

How much can an Indiana payday lender charge?

Up to 15% of the first $250, 13% of the amount from $250 to $400 and 10% of the amount from $400 to $825. On a two-week loan that is an APR above 300%.

What is the statute of limitations on debt in Indiana?

Generally six years for written contracts to pay money, accounts and credit card debt.

How much of my paycheck can be garnished in Indiana?

The lesser of 25% of disposable earnings or the amount above 30 times the federal minimum wage. A court can lower it to as little as 10% for good cause.

Sources

Facts on this page were checked against these sources on October 13, 2026. The APR figures are our own calculations from the statutory fee tiers for a 14-day loan.