Indiana § 37-3-3-5 - Term of loan; consecutive small loans; extended payment plans

§ 37-3-3-5. Term of loan; consecutive small loans; extended payment plans

Sec. 5. (a) A small loan may not be made for a term of less than fourteen (14) days.

(b) If five (5) consecutive small loans have been made to a borrower after the borrower's initial small loan, another small loan may not be made to that borrower within seven (7) days after the fifth consecutive small loan is paid in full. After the borrower's fifth consecutive small loan, the balance must be paid in full.

(c) Subject to subsection (d), whenever a borrower has entered into an initial small loan followed by three (3) consecutive small loans, the lender shall offer the borrower the option to repay:

(1) the third consecutive small loan; and

(2) subject to subsection (b), any small loan entered into after the third consecutive small loan;

under an extended payment plan. At the time of execution of a small loan described in subdivision (1) or (2), the lender shall disclose to the borrower the extended payment plan option by providing the borrower a written description of the extended payment plan option in a separate disclosure document approved by the director.

(d) A lender shall offer an extended payment plan under subsection (c) under the following terms and conditions:

(1) A borrower shall be permitted to request an extended payment plan at any time during the term of a third or subsequent consecutive small loan if:

(A) the borrower has not defaulted on the outstanding small loan; and

(B) the rescission period under section 6(f) of this chapter has expired.

(2) An extended payment plan must allow the outstanding small loan to be paid in at least four (4) equal installments over a period of not less than sixty (60) days.

(3) An agreement for an extended payment plan may not require a borrower to pay any amount before the original maturity date of the outstanding small loan.

(4) The lender may not assess any fee or charge on a borrower for entering into an extended payment plan.

(5) An agreement for an extended payment plan must be in writing and acknowledged by both the borrower and the lender.

(6) A borrower may not enter into another small loan transaction while engaged in an extended payment plan.

(7) A lender shall not:

(A) compel, advise, solicit, or coerce a borrower to not exercise the borrower's right to request an extended payment plan;

(B) discourage a borrower from exercising the borrower's right to request an extended payment plan; or

(C) take any other action to influence a borrower's right to request an extended payment plan.

(e) An agreement for an extended payment plan under subsection (c):

(1) shall be considered an extension of the outstanding small loan; and

(2) may not be considered a new loan.

[Pre-2026 Revision Citation: 24-4.5-7-401.]

As added by P.L.115-2026, SEC.97.