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Indiana Payday Loans - After careful review, Indiana opts to regulate payday loans as a valuable service

Indiana State Map
Indiana State Map
As with anything in life, when there is something new, there is most often misunderstanding and miscommunication, which are commonly tied to a fear of the unknown. As humans we have become creatures of habit and very attached to what we considered to be the norm in our individual lives. Take away that "norm" and we are in very unfamiliar territory, and afraid of unknown possibilities in relation to products, services, people, places and things. When we began to step outside of our comfort zone, we often find that there are new things to learn and new experiences to enjoy. Think of that first day of leaving the safety and security of home and heading off to that brave new world of college; while it is something that we all look forward to, it is also a great source of stress and hesitation, as we are not fully elsewhere of what we should expect upon reaching her destination. At some point, we find out that things aren't always as bad as our imaginations, reporters or buddies might have us believe. Often times we find out that, with experience comes learning.

The subject of Indiana payday loans has been greatly debated, speculated and even feared in some cases. What has to happen at some point is that we have to take a very careful look at exactly what cash advances can and will mean for us as individuals. In its simplest of terms, cash advances, payday loans or deferred presentment are simply ways of bridging a financial gap when we have an unexpected feel or emergency situation arise between paychecks. Everyone has had that experience of being midway through a pay period, and having suddenly come face-to-face with an unexpected hospital bill, urgent out-of-town trip or even the occasional forgotten anniversary or birthday. Payday advances serve the same purpose as going to a friend or relative for a few quick bucks to tide us over. In the state of Indiana, in 2004, payday loans became covered under the Small Loan Act of 2002 after extensive debate in the legislature. Many detractors wanted to have nothing to do with the industry, but due to their lack of real knowledge on the subject (having reported opinions and conjecture from second and third hand sources) legislation was ultimately enacted for the good of the state. The argument that won out was very basic; provide the consumer with a viable source of emergency funds, and educate them on the best options and uses of these types of services, while at the same time closely monitoring and regulating all of the companies that are operating in this venue.

Indiana State Flag
Indiana State Flag
The state went to great measures to assure consumers that any companies operating under the auspices of Indiana would be subject to licensing requirements - which require extensive disclosure during the application process (and beyond), and these companies would be regularly monitored and audited to ensure that their practices were above board and transparent. The state placed a 14 day minimum on all Indiana payday loans, which means that the consumer has no less than two weeks to pay off the balance of any borrowed monies. The state also set limitations on the amount of money that any one the client of these services could borrow; within the limits of $50-$500, a borrower could request a loan up to but not exceeding their personal gross income. This limitation was put in place to take away some of the possibilities of borrowers ending up an extremely unaffordable circumstances due to borrowing more than they actually bring in. This particular piece of legislation was not included as an insult to the consumers in terms of money management, but was put in place with the knowledge that under some circumstances, we as consumers may face the possibility of borrowing larger amounts than we can forward due to the nature of some emergency situations.

The state also imposed limitations on the interest rates that can be charged on Indiana payday loans; these rates range from 10% on loans between $410 and $500, 13% on loans of $251-$400, and 15% on loans of $250 or less. By placing a sliding scale on the interest rates to recharge for various size of loans, the state effectively eliminated some of the cost that would be incurred for the larger loans that might be considered more of a "severe emergency" type of borrowing scenario.

Indiana payday loans
Indiana payday loans
On the other side of the fence, realizing that viable payday lenders also need protection from consumers, in some cases (just as any industry does), the state also enacted certain laws to revive the payday lenders with recourse and assurance that would shield them from consumers engaged in what might be considered illegal activity; this would include unscrupulous individuals who would fraudulently represent themselves under another's identification, or individuals involved in check deception in any of its many forms. This would include check kiting, stolen checks and the historic practice of writing checks that are simply no good to begin with. The law has certain provisions for financial recovery on behalf of the commercial enterprise, while also stipulating the enforcement practices of the state for check fraud.

After all is said and done, it is clear that the state is actively taking a role in the future of its individual and corporate citizens, being sure to provide adequate protection and monitoring on both sides. These measures have been taken after extensive reviews have all led to the same conclusion; that Indiana payday loans are worthwhile as a valuable cash access point for individuals, and as a thriving commercial industry. With the direction and legislation handed down by the state, operators who would attempt to run their business outside of the law, will be appropriately reprimanded, as will any individual that sets out to deceive providers of this valuable service - just as they would be if they attempted to rob any other established financial institution.