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Payday Lending:

A Drain on Hoosier Families & Communities


In 2002, the Indiana General Assembly granted payday lenders an exemption to Indiana's interest rate cap of 36 percent and criminal loansharking limit of 72% APR. Less than two decades later, payday lenders have established a significant footprint across our state. Financial Drain: Payday Lenders Extract Millions from Hoosier Communities documents the scope and impact of these lenders on families and communities, finding:


Payday lenders have drained over $300 million in finance charges from Hoosier families and communities in the past five years.

• There are 262 payday loan storefronts across Indiana, and out-of-state companies operate 86% of them.

• Payday storefronts are disproportionately located in low-income communities and communities of color.

• The typical payday loan borrower has a median income of just over $19,000 per year and reborrows eight to ten times, paying more in fees than the amount originally borrowed.

Many borrowers experience a cascade of negative consequences, include overdrafts, defaults, involuntary bank account closure, bankruptcy, and more.


SEPTEMBER 2019 | Download the report pdf | Download a one-page summary



Financial Drain Report

Payday Lending in Indiana Factsheet

Quick Facts About Payday Lending


Payday loans trap borrowers in a cycle of high-cost debt. Learn the facts:


The typical borrower is a renter earning less than $40,000 per year.

60% of payday loans are reborrowed the same day an old loan is repaid.

Compared to carry a balance on a credit card, a payday loan can cost 15-20 times as much.

Payday lending can drive borrowers into bankruptcy.

Indiana has one of the highest bankruptcy rates in the country.

Payday lenders drain tens of millions in fees each year from Indiana's economy.





Polling Shows Hoosiers Support Reform


Bellwether Research & Consulting asked 600 Hoosiers about payday lending:


Nearly 90% of Hoosier voters support a 36% APR cap, even after hearing pro-industry arguments against the proposal.

Eight-seven percent say payday loans are a "financial burden" and 84% think they are "harmful."

Three out of four voters would oppose a new payday loan store opening in their neighborhood.

More than one third of polling respondents had taken out or knew someone who had taken out a payday loan.; these respondents expressed similarly high levels of support for reform.

A large & diverse coalition also supports payday lending reform in Indiana.




Image of Polling Memo

Ready to Help Stop the Debt Trap?


Sign this letter to the Indiana General Assembly calling for a 36% APR cap.

Share a story about how high-cost lending has affected you or someone you know.

Call or write your lawmakers and let them know you want to see reform.


Other Resources Related to Payday and Subprime Lending


Alternatives to Payday Lending in Indiana

Resource | Indiana Institute for Working Families


Payday Lending in Indiana

Policy Brief | Indiana Institute for Working Families


Why 36 is the Fix for Small Loans in Indiana

Blog Post | Indiana Institute for Working Families


Report on Predatory Lending Practices Directed at Members of the Armed Forces and Their Dependents

Report to Congress | U.S. Department of Defense


Misaligned Incentives: Why High-Rate Installment Lenders Want Borrowers Who Will Default

Report | National Consumer Law Center


Payday Loans and Deposit Advance Products

White Paper | Consumer Financial Protection Bureau


Payday Lending in America: Who Borrows, Where They Borrow, and Why?

Report | Pew Charitable Trusts