Indiana Interest Rate Laws

Rates of interest in the state of Indiana are governed by laws prescribed in Title 24, Article 4.5, Chapter 3 (Loans) of Indiana Code.  Section 24-4.5-3-201 of this Chapter provides that the maximum rate of interest for consumer loans, not including supervised loans, should not exceed 21 percent per annum on the unpaid balances of the principal.  Under Section 24-4.5-3-501, the rate of interest on supervised consumer loans can exceed the 21 percent per annum limit.  Various rates of interest on supervised loans are prescribed in Section 24-4.5-3-508.

Under Section 24-4.5-5-301, any person who charges usurious interest commits a Class A misdemeanor.  By the authority of Section 24-4.5-5-202, persons paying such usurious interest have the right to recover, from the person receiving such amount, the amount paid in excess of the statutory interest and a penalty in an amount up to three times the amount of the loan finance charge determined by the court.  Rate of interest on judgments rendered upon contract action will be the rate agreed upon in the contract and this rate should not exceed eight percent per annum, pursuant to Section 24-4.6-1-101.  The same Section and Section 24-4.6-1-102 also prescribes the same rate of eight percent interest in the absence of any contract between the parties.

Under Section 34-54-8-5, the rate of interest in actions in which the state, a board, a commission, an agency, or an official is authorized by law to sue or be sued is six percent (6%) per annum.  Interest begins with the forty-fifth day after the judgment is rendered.

Burns Ind. Code Ann. § 24-4.5-3-201

Loan finance charge for consumer loans other than supervised loans.
(1) Except as provided in subsections (6) and (8), with respect to a consumer loan other than a supervised loan (IC 24-4.5-3-501), a lender may contract for a loan finance charge, calculated according to the actuarial method, not exceeding twenty-one percent (21%) per year on the unpaid balances of the principal.
(2) This section does not limit or restrict the manner of contracting for the loan finance charge, whether by way of add-on, discount, or otherwise, so long as the rate of the loan finance charge does not exceed that permitted by this section. If the loan is precomputed:
(a) the loan finance charge may be calculated on the assumption that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on rebate upon prepayment (IC 24-4.5-3-210).

Burns Ind. Code Ann. § 24-4.5-3-501

Definitions — “Supervised loan” — “Supervised lender”.
(1) “Supervised loan” means a consumer loan in which the rate of the loan finance charge exceeds twenty-one percent (21%) per year as determined according to the provisions on loan finance charge for consumer loans ( IC 24-4.5-3-201).

Burns Ind. Code Ann. § 24-4.5-3-508

Loan finance charge for supervised loans.
(1) With respect to a supervised loan, including a loan pursuant to a revolving loan account, a supervised lender may contract for and receive a loan finance charge not exceeding that permitted by this section.
(2) The loan finance charge, calculated according to the actuarial method, may not exceed the equivalent of the greater of either of the following:
(a) the total of:
(i) thirty-six percent (36%) per year on that part of the unpaid balances of the principal which is three hundred dollars ($300) or less;
(ii) twenty-one percent (21%) per year on that part of the unpaid balances of the principal which is more than three hundred dollars ($300) but does not exceed one thousand dollars ($1,000); and
(iii) fifteen percent (15%) per year on that part of the unpaid balances of the principal which is more than one thousand dollars ($1000); or
(b) twenty-one percent (21%) per year on the unpaid balances of the principal.

Burns Ind. Code Ann. § 24-4.5-5-301

Knowing violations.
(1) A lender who knowingly makes charges in excess of those permitted by the provisions of this article commits a Class A misdemeanor.

Burns Ind. Code Ann. § 24-4.5-5-202

Effect of violations on rights of parties.
(1) If a creditor has violated the provision of this Article applying to limitations on the schedule of payments or loan term for supervised loans ( IC 24-4.5-3-511), the debtor is not obligated to pay the loan finance charge, and has a right to recover from the person violating this Article or from an assignee of that person’s rights who undertakes direct collection of payments or enforcement of rights arising from the debt a penalty in an amount determined by the court not in excess of three times the amount of the loan finance charge. No action pursuant to this subsection may be brought more than one (1) year after the due date of the last scheduled payment of the agreement with respect to which the violation occurred.

Burns Ind. Code Ann. § 24-4.6-1-101

Maximum interest rate.
Except as otherwise provided by statute, interest on judgments for money whenever rendered shall be from the date of the return of the verdict or finding of the court until satisfaction at:
(1) The rate agreed upon in the original contract sued upon, which shall not exceed an annual rate of eight percent (8%) even though a higher rate of interest may properly have been charged according to the contract prior to judgment; or
(2) An annual rate of eight percent (8%) if there was no contract by the parties.

Burns Ind. Code Ann. § 24-4.6-1-102

Rate in absence of agreement.
When the parties do not agree on the rate, interest on loans or forbearances of money, goods or things in action shall be at the rate of eight percent (8%) per annum until payment of judgment.

Burns Ind. Code Ann. § 34-54-8-5

Interest in certain actions against state or agency.
(a) This section applies to actions or proceedings in which:
(1) the state, a board, a commission, an agency, or an official is authorized by law to sue or be sued; and
(2) a money judgment is authorized by law to be entered and to be paid out of state funds in the custody of the state or in the custody of the board, commission, agency, or official.
(b) Interest attaches to a final judgment entered in an action or proceeding described in subsection (a):
(1) at the annual rate of six percent (6%); and
(2) beginning with the forty-fifth day after the rendition of the judgment.


Inside Indiana Interest Rate Laws