Payday Loan Laws

Illinois Gov. signs payday loan bill June 2010

August 20, 2012
Governor Quinn Signs Payday Loan Law
New law protects consumers from unlicensed lenders

CHICAGO – August 20, 2012. Governor Pat Quinn today signed a new law to shield consumers from unlicensed lenders. House Bill 3935 imposes a Class 4 felony on lenders who have not been licensed by the Illinois Department of Financial and Professional Regulation (IDFPR), and protects consumers trapped in these high-interest loan deals from having to pay back the debt. Today's action is the latest by the governor to crack down on predatory lending and help consumers.

“Two years ago, we signed new laws to curb predatory lending and make the payday loan industry more transparent,” Governor Quinn said. “Today’s action is the next step in protecting consumers from unscrupulous, unlicensed lenders.”

Sponsored by Sen. William Haine (D-Alton) and Rep. Greg Harris (D-Chicago), HB 3935 provides consumers with greater protections by putting teeth into the penalty and declaring any such loan as “null and void." Under existing law, the IDFPR may issue a cease-and-desist order to anyone doing business without the required license. Currently, 522 payday lenders are licensed and regulated by the IDFPR, which also regulates 1,054 Consumer Installment Loan Act lenders and 240 Sales Finance lenders.

The reforms –The Consumer Installment Loan Act and Payday Loan Reform Act – are amended by this law.

The law is effective on Jan. 1, 2013.

Illinois Governor Pat Quinn signed into law a bill that will cap rates for installment loans in Illinois. The new law caps loans under $4k to a 99% Annual Percentage Rate (APR) and over $4k at 36% APR.

This Illinois payday loan law goes into effect 9 months after it’s signed. This would make this bill “live” on April 21, 2011.

It should be noted that another alternative product is being allowed under the PLRA ( Illinois payday loan reform act). This product will allow a fee of $15 per $100 loaned. This Illinois payday loan product is partnered with the Veritec state database.

The new law also includes provisions to help borrowers repay loans more easily. For example, lending is based upon the borrower’s ability to repay the loan. Monthly payments on consumer installment loans are limited to 22.5 percent of the borrower’s gross monthly income. In order to give borrowers enough time to repay the loan, the new minimum loan term will be set at six months – an increase from the previous four month term.

Here's a link to the Illinois press release:
Illinois Payday Loan Law Press Release

Here is the link to for the Illinois payday loan data base

The old Illinois payday loan fee schedule is described below...

Illinois Payday loan laws. Illinois Payday loan legislation. Illinois has specific payday advance laws. The rate is $15.50 per $100 loaned.

The term of a payday loan is a minimum of 13 days and a maximum of 120 days. Maximum amount of a cash advance is $1000 or 25% of the consumer's monthly income. Rollovers are prohibited.

For a thorough discussion of the payday loan industry and access to our payday loan training materials, we recommend you proceed to Payday and Paycheck

Illinois Payday Loan Laws & Legislation State Information

Illinois Payday Loan Laws & Legislation State Information

Legal Status: Legal

Ill. Comp. Stat. Ann. § 122/1-1

Loan Terms:
Maximum Loan Amount: lesser of $1000 or 25% gross monthly income
Loan Term: 13-45 days
Maximum Finance Rate and Fees: $15.50 per $100
Finance Charge for 14-day $100 loan: $15.50
APR for 14-day $100 loan: 403%

Debt Limits:
Maximum Number of Outstanding Loans at One Time: Two
Rollovers Permitted: None (cannot rollover)
Cooling-off Period: 7 days after 45 consecutive loan days
Repayment Plan: Yes

Collection Limits:
Collection Fees: One $25 NSF fee (Presentment limit = 2)
Criminal Action: Prohibited

Where to Complain, Get Information:
Regulator: Illinois Division of Financial Institutions
Address: Consumer Credit Section, 320 W. Washington Springfield IL 62701
Phone: (888) 298-8089
Regulatory Contact: Phil Sanson,, Acting Consumer Credit Assistant Supervisor
Regulator Website

Licensee Database

Online Resources:
Brochure: Consumer Guide to Payday Lending

Guia de Prestamos de Payday Loan de Illinois