§ 24-4.5-7-401 — Term of loan; consecutive small loans; extended payment plans

(1) A small loan may not be made for a
term of less than fourteen (14) days.
(2) 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.
(3) Subject to subsection (4), 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:
(a) the third consecutive small loan; and
(b) subject to subsection (2), 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 (a) or (b), 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.
(4) A lender shall offer an extended payment plan under subsection
(3) under the following terms and conditions:
(a) 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:
(i) the borrower has not defaulted on the outstanding small
loan; and
(ii) the rescission period under section 402(6) of this chapter
has expired.
(b) 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.
(c) 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.
(d) The lender may not assess any fee or charge on a borrower for
entering into an extended payment plan.
(e) An agreement for an extended payment plan must be in
writing and acknowledged by both the borrower and the lender.
(f) A borrower may not enter into another small loan transaction
while engaged in an extended payment plan.
(g) A lender shall not:
(i) compel, advise, solicit, or coerce a borrower to not exercise
the borrower's right to request an extended payment plan;
(ii) discourage a borrower from exercising the borrower's right
to request an extended payment plan; or
(iii) take any other action to influence a borrower's right to
request an extended payment plan.
(5) An agreement for an extended payment plan under subsection
(3):
(a) shall be considered an extension of the outstanding small loan;
and
(b) may not be considered a new loan.

Legislative History

As added by P.L.38-2002, SEC.1. Amended by P.L.258-2003, SEC.2; P.L.73-2004, SEC.26; P.L.10-2006, SEC.16 and P.L.57-2006, SEC.16; P.L.213-2007, SEC.25; P.L.217-2007, SEC.24; P.L.186-2015, SEC.25; P.L.69-2018, SEC.28.