Illinois Payday Loan Laws and Regulations

Illinois Payday Loan Laws and Regulations

Are Payday Loans Legal in Illinois?

Short-term Online Payday Loans in Illinois are legal and are mostly regulated through 815 ILCS 122 et seq..

Illinois Trends Report Select Consumer Loan Products by Department of Financial and Professional Regulation.pdf

The Payday Lending legislation covers all the parts of the process concerning:

  • Payday Loan amounts
  • Payday Loan repayment terms
  • Payday Loan online direct lenders
  • Payday Loan stores near you
  • Payday Loan interest rates and other fees
  • Payday Loan collecting practices
  • Payday Loan default penalties
  • The number of outstanding Payday Loans as well as a cooling-off period in-between etc.

The main Payday Loan requirements in Illinois are:

  • US residence
  • Minimum regular income of $1,000 per month
  • Valid checking or savings account with direct deposit
  • Phone number and e-mail address

Any eligible Illinois resident can apply for $1000 Payday Loan amount. It should be repaid within 120 day(s). Earlier payments don’t contemplate any additional penalty fees. The interest rates are maximum 403.00%, but on average direct lenders charge 400% APR. For other details read further to find out how many Payday Loans you can borrow, whether rollovers or extensions are allowed, etc.

Illinois Payday Loan Terms and Amounts 

Illinois residents who are eligible for a Payday Loan can get up to $1000 cash advance per contract. The repayment term is capped at 13 – 120 days.

However, there are no limits on the purpose of loan usage. Any urgent expenses, unforeseen bills, car repair, home repair, etc. may seem a sound reason to apply for a Payday Loan in Illinois.

If a Payday cash advance is not enough, there are always other options to receive the necessary funds in Illinois: unsecured Installment Loans, bad credit Personal Loans, Title Loans, Check Cashing, Pawn Shops, etc.

Illinois Payday Loans online laws 

Payday loans from both storefront and online lenders are legal in the state of Illinois. But the companies should operate according to the Illinois Division of Financial Institutions, 320 West Washington, 3rd Floor, Springfield, IL 62786, (888) 473-4858 regulations.

Though there’re some limits on how payday loan direct lenders should run businesses, still there are some. Reputable online lenders operating in accordance with all relevant state and federal laws can be applied to and compared on our platform using a simple online application form.

You state the necessary amount, fill in your personal information and get suitable offers from legit direct lenders. It takes only a few minutes and doesn’t affect your credit score. 

Illinois Payday Loans interest rates, fees, and other finance charges 

The main part of the payday loan payment is mostly made up of the interest rate, or APR. The maximum APR that may be charged for short-term cash advances in Illinois is 403.00%.

Besides, the total cost of a Payday Loan includes some additional fees. Illinois lending rules allow charging $25 NSF fee.

The law obligates Illinois Payday Loan lenders to provide you with a written disclosure of all the rates and fees in understandable language. You should read them carefully and if you agree acknowledge the notification by signing the contract.

Illinois Payday Loans direct lenders regulations 

According to Illinois payday loan laws, all direct lenders are obliged to register their companies which will allow issuing payday loans contracts. It concerns both Online Payday Loans and Payday Loans Near Me.

Now, payday lenders are operating online to make it faster, easier, and more convenient for borrowers to get the necessary funds. However, it is often illegal for online payday lenders to make loans to Illinois consumers. Payday lenders, or direct deposit lenders, must be licensed by the state in order to run a lending business in Illinois, and to be licensed, the lender is required to have a physical location in the state. Illinois has put these laws in place to prevent consumers from getting scammed on the web, and you should apply for online payday lenders’ loans with caution.

But Illinois Payday Loan lenders are prohibited to threaten you for late payments or loan default and conduct any criminal actions against you.

Illinois Payday Loans consumer information 

Besides amounts, rates, and fees, consumers must be also well aware of other details of Payday Loans in Illinois. They include the availability and number of rollovers, extensions, repayment plans, a cooling-off period, any default penalties or additional fees, etc. Check out the table below to find the most essential information:

Rollovers or extensions 55 day repayment plan
Cooling-off period 7 days
NSF fee $25 NSF fee
Criminal actions Prohibited

Look for more detailed information on the official Iowa state regulator website – Illinois Division of Financial Institutions, 320 West Washington, 3rd Floor, Springfield, IL 62786, (888) 473-4858.

Legitimate Payday Loans Online with NO credit check in Illinois 

Looking for a legal Payday Loan with No credit check in Illinois? You must understand the meaning of this phrase correctly at first. No credit check implies that a lender will not inquire about your credit history information from or send your borrowing data to any of the three major credit bureaus Equifax, Experian, and TransUnion.

If you don’t want to damage your credit history, Illinois law allows you to apply for a Payday Loan with No credit check. But you should understand that a lender needs to check your creditworthiness at least in some way. He can perform a soft credit check when a lender pre-approves you for a loan and this inquiry will not appear on your credit report. Or there’re other ways to prove you can afford the cash advance. Payday Loan lenders use the tracking system to verify your debts, check your income, etc. And generally, they charge higher interest to lessen the risks.

Illinois Payday loans online no credit check are one of the easiest options of getting quick cash to cope with emergency financial requirements, especially for people with poor credit.

Does Illinois law allow Payday Loans for bad credit borrowers?

The average credit score in Illinois is 683, placing it in the good range. But it doesn’t mean that those who have worse credit can’t apply for a Payday Loan in Illinois. 

  • First of all, there’re a lot of legit direct lenders in Illinois providing Payday cash advances to borrowers with both good and bad credit scores.
  • Secondly, you can always find a cosigner to increase your chances of being approved for a bad credit Payday Loan.
  • Find out how to improve your credit score and do your best to do it fast. 
  • Or consider taking out a bad credit Installment Loan, or bad credit Personal Loan.

Legit Payday Loans in Illinois collection practices 

If you can’t repay the loan amount plus interest on a due date it means you default the loan. When Illinois direct lender isn’t able to cash your check after the repayment term is over he may charge you an NSF fee. NSF fee means there are non-sufficient funds on your account. The amount charged is determined by the lender and stated in the agreement and may also be limited by the state’s Payday Loan law. In Illinois it’s $25 NSF fee.

What concerns collection practices, first of all, you may stay assured that any criminal actions are forbidden in Illinois. The laws limit the collection actions lenders can take – When a borrower has failed to repay an Illinois payday loan, the laws dictate that lenders are not allowed to take any legal action against that borrower unless the individual has closed his or her checking account prior to repaying the debt in full. This essentially means that borrowers who maintain their checking accounts and who are unable to repay payday loans will be protected from payday loan lenders’ attempts to sue them or garnish their wages.

If you think that your payday lender violates the Illinois Payday Loans law, you may file a written complaint with Illinois Division of Financial Institutions, 320 West Washington, 3rd Floor, Springfield, IL 62786, (888) 473-4858. The supervisor from that office interviews witnesses, reviews the payday lender’s business records and documentation, and determines whether to pursue civil or criminal charges.

Illinois Payday Loans’ latest changes 

More than 20% of Illinois residents have no bank account and have to apply for small consumer loans such as Payday cash advances. And there are a lot of payday lenders in Illinois ready to provide these high-interest loans to residents. 

The total amount of Payday advances taken out by Illinois consumers was more than 200K, and most of the borrowers have low income. 61% earn less than $30,000 annually.

The authorities constantly try to limit the interest and the rights of Payday lenders.

Illinois Payday Loan’s historical background 

2000 The law regulating loans under the term of 30 days was passed but Payday lenders avoided it by increasing the repayment term to 31 day.
2005 Payday Loan Reform Act was passed which legally regulated Payday loans. It prohibited rollovers, and made lenders check the borrowers’ credit. The law concerned laws with the repayment term under 120 days. The lenders again avoided the rules by extending the terms up to 130 days.
2006 The law limited the APR for the loans to the military at 36%.
March 21, 2011 HB 537 It amended the Payday Loan Reform Act (PLRA) to create Installment Payday Loans and the Consumer Installment Loan Act (CILA) to create Small Consumer Loans.

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