Payday Loans are in Demand in Indiana

Posted on Thursday, September 10th, 2009 at 5:26 pm in Cash Loan Info by State

As one of the states hardest hit by the decline of the manufacturing industry and the national financial crisis, Indiana has a lot of residents who have fallen on hard times. Rising unemployment, falling house prices and a depressed local economy have sent plenty of formerly comfortably-off people scrambling to find ways to make ends meet. If you’re in this situation, and a sudden financial emergency such as a medical expense or unexpectedly large utility bill comes along, where do you turn to get a short-term loan?

It can be hard to persuade the bank to lend you money these days, especially if you have poor credit. If you’re like a lot of us, your credit cards are already charged up to the limit and your savings are running dry. A realistic solution to your problem could be to take out a payday loan to tide you over until your next paycheck arrives. In Indiana, you can borrow up to 20% of your monthly earnings from a payday lender, as long as it’s no more than $550. You are allowed to hold loans with two different paycheck lending companies, thereby doubling the amount you can obtain.

This means that if your income is $1,500 a month, you’ll be able to apply for a cash advance of $300, but if you make $3,500, you won’t be able to get more than the upper limit of $550 from each lender. Please note that you probably won’t receive as much as you’re entitled to the first time around, however.

Payday lenders in Indiana are permitted to charge interest of up to 15% on the first $250 of your loan. On the portion of the loan from $251 to $400, you pay a maximum of 13%, and above that ($401-550) the interest is limited to 10%. If you borrow $100 it will therefore set you back $15 no matter how long your loan is for, while you’ll pay $37.50 for a $250 loan and $62 for a $450 loan.

Indiana differs from most other states in that state laws permit you to hold a payday loan for as long as you like, provided that the duration of the loan is agreed when it is issued and that it is at least 14 days. Therefore, you can take out a payday loan for a few weeks, and receive several paychecks during that time, which will enable you to pay it back comfortably. You must calculate carefully before accepting the loan, though, to be sure that you can repay it completely at the end of the term, since you won’t be allowed to extend it.

Once you’ve paid back your payday loan you’re allowed to take out another one straight way, for a total of six loans in a row. If you want a seventh loan, you’ll have to wait for seven days before applying, however. After you’ve had three payday loans without a break from a single lender, you’re entitled to enter a fee-free payment plan consisting of four or more equal payments.