In Indiana, loans are generally capped at a maximum interest rate. Under new legislation, most loans under $50,000 are only allowed a maximum of 21% interest. However, higher or lower maximum interest rates are allowed in various situations.
Loans Under $50,000 Are Now Capped at 21%
In Indiana, new legislation capped the maximum interest rate for loans under $50,000 at 21%. Generally, loans in the past in Indiana were also capped for the most part at under 25% under general usury legal concepts. Only recently have these 21% restrictions come into place. It also applies only to loans under $50,000 only.
Various Types of Loans Still Greatly Exceed Interests Caps in Indiana
Payday loans and online loans can still greatly exceed the 21% maximum in practical operation. These loans are non-conventional and high interest-rate. Many providers of these loans are even located outside of the United States. With penalties, restrictions, and other harsh terms, you may end up paying a much higher interest rate than what may be generally considered legal or acceptable in Indiana.
The 10% Judgment Rate Maximum
If you receive a lawsuit that goes to judgment, you will be required to pay interest on the judgment amount. Generally in Indiana, the maximum you will be charged on judgment interest is 10%. For general purposes, Indiana considers 10% interest to be a fair and equitable rate.
Indiana’s interest rate for judgments can also help you evaluate how good of an interest rate you are receiving on a personal loan. If you are seeking a personal loan, a rate in excess of 10% could be logically considered a high interest rate. A rate under 10% could be considered a lower, more desirable interest rate.