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Tidbit of Indiana Law on Payday Lenders

Date: Fri, 05/19/2006 - 10:54

Submitted by sapphiredreams
on Fri, 05/19/2006 - 10:54

Posts: 272 Credits: [Donate]

Total Replies: 21


During the research, I have come across this on the Indiana state gov website. Thought I'd share.

What are the consequences of a Payday Loan?

The cost of the loan is very high.

Once you get a loan, where will you get the additional money to pay it off?

You can be threatened with prosecution for "hot" or "bounced" checks, even though the lender knew at the time you wrote the check that you had insufficient funds in your account—that was the reason for the loan. This is not allowed in Indiana.

If you pay another fee to renew the loan for another term, you may get caught in a cycle of debt. You are never able to pay down the principal, but you are repaying the fee over and over again. The result can be that you are paying an annual percentage rate on the loan of well over 1000 percent! The maximum apr in Indiana is now 390% for a loan up to $250 at 15% for 14 days.


I also live in indiana. I want to make sure that i understand this correctly.

If i took out some internet payday loans and the companies are not licensed in indiana then those are considered void? What approach should be taken when in fact if they are not licensed in indiana?

If i lived in indiana and took a pdl out in il (in person at a store) would you go by indiana or illinois laws?

Thanks for any info.


lrhall41

Submitted by landrylou on Fri, 05/19/2006 - 11:28

( Posts: 310 | Credits: )


Northwest Indiana (South Lake County)

Also, I just wanted to post those laws I discovered to ease the minds of people like me who took out payday loans and could not keep up. To reassure anyone that NO ONE WILL GO TO JAIL for not keeping up on the loan payments! Not to give in to the scare tactics and to arm yourself with knowledge.

If the lender is not licensed in Indiana, they are NOT allowed to take you to jail or seek damages, PERIOD! Do not fall for stronghold tactics by those collectors!

The honorable thing to do is repay the principle at the least and the interest allowed under Indiana laws.


lrhall41

Submitted by sapphiredreams on Fri, 05/19/2006 - 11:30

( Posts: 272 | Credits: )


Okay....I found a statement by the Indiana Attorney General, Jeff Modisett, that I find very interesting and helpful.

"Lenders that assess a loan finance charge in accordance with Indiana's consumer credit code are still subject to Indiana's loansharking statute. Finance charges that exceed the statutory limits outlined in the consumer credit code are subject to refund. If the finance charges are more than double the APRs set out in Indiana's consumer credit code, they violate the loansharking statute and are void."


lrhall41

Submitted by sapphiredreams on Fri, 05/19/2006 - 11:34

( Posts: 272 | Credits: )


Jo, it doesnt. The attorney general's office stated that they CAN work with us and help us battle this.

The information about licensing was by the rude guy on the general customer credit care Indiana line. After I hung up, I researched some more to find the direct phone number to the Attorney General's office. Whew, after the phone call, I got some of my hope back! ;)


lrhall41

Submitted by sapphiredreams on Fri, 05/19/2006 - 12:30

( Posts: 272 | Credits: )