Payday Loans and Cash Advance in Illinois
Capped at 36% APR since March 2021. Below: the law, the limits, what $300 costs here, who regulates it, and how to request a cash advance online in Illinois.
Restricted in Illinois. Max amount: The lesser of $1,000 or 25% of gross monthly income (815 ILCS 122/2-5). Max fee: 36% APR all-in, calculated by the Military Lending Act method (815 ILCS 123/15-5-5; 815 ILCS 122/2-5). One returned payment fee of up to $25 and a $1 verification fee are the only extras. A $300 loan for 14 days costs about $4.14 (36% APR). Regulator: Illinois Department of Financial and Professional Regulation, Division of Financial Institutions, 888-473-4858.
Is a Cash Advance Legal in Illinois?
Payday loans are still legal in Illinois on paper, but since March 23, 2021 no lender may charge more than 36 percent APR on one, and at that price the traditional two-week payday product has largely left the state. The Predatory Loan Prevention Act, 815 ILCS 123, applies a 36 percent all-in cap to nearly every consumer loan made by a non-bank lender, measured the same way the federal Military Lending Act measures it, so fees count as well as interest. A loan above the cap is void and the lender has no right to collect a cent of principal, interest or fees. The older Payday Loan Reform Act, 815 ILCS 122, remains in force and now carries the same 36 percent limit alongside its structural rules: loans of no more than the lesser of $1,000 or 25 percent of gross monthly income, a minimum term of 13 days, a ban on rollovers, a statewide database, and a right to a no-cost repayment plan after 35 days. The Illinois Department of Financial and Professional Regulation (IDFPR) licenses payday lenders and enforces both laws. What that means for you is that any Illinois payday loan you are offered must be priced like a credit union loan, and anything more expensive is not a valid debt.
The governing law is Illinois Predatory Loan Prevention Act, 815 ILCS 123; Illinois Payday Loan Reform Act, 815 ILCS 122 (815 ILCS 123/15-5-5, 15-5-10, 15-5-15; 815 ILCS 122/2-5, 2-30, 2-35, 2-40).
Loan Limits and Terms in Illinois
| Rule | IL |
|---|---|
| Maximum amount | The lesser of $1,000 or 25% of gross monthly income (815 ILCS 122/2-5) |
| Maximum term | 120 days for a payday loan; 180 days for an installment payday loan (815 ILCS 122/2-5) |
| Minimum term | 13 days (815 ILCS 122/2-5) |
| Maximum fee per $100 | 36% APR all-in, calculated by the Military Lending Act method (815 ILCS 123/15-5-5; 815 ILCS 122/2-5). One returned payment fee of up to $25 and a $1 verification fee are the only extras |
| APR on a $300, 14-day loan | 36%, which is $4.14 on $300 for 14 days |
| Rollovers | Prohibited (815 ILCS 122/2-30) |
| Cooling-off period | 7 days after any stretch of 45 consecutive days in payday debt (815 ILCS 122/2-5) |
| Statewide database | Statewide consumer reporting database that lenders must check before lending (815 ILCS 122/2-35) |
The cap is the whole story on price. Because Illinois uses the Military Lending Act's all-in method, a lender cannot get around 36 percent with an origination fee, a membership fee or an add-on product; those count in the APR. The Payday Loan Reform Act then controls the shape of the loan. You cannot borrow more than 25 percent of your gross monthly pay or $1,000, whichever is less, and the loan cannot be shorter than 13 days. You cannot be kept in payday debt for more than 45 consecutive days without a 7-day break, and the database is how lenders and IDFPR police that. Rollovers are banned outright. If a loan has been open 35 days you can demand a repayment plan with no added charges. The IDFPR's 2021 consumer notice adds that the cap reaches loans made online or by phone, not just in stores.
What a $300 Loan Costs in Illinois
| Amount | Term | Fee | You repay | APR |
|---|---|---|---|---|
| $300 | 14 days | $4.14 | $304.14 | 36% |
The Predatory Loan Prevention Act caps every charge on a covered consumer loan at a 36 percent annual percentage rate (815 ILCS 123/15-5-5), and the Payday Loan Reform Act repeats that cap for payday loans (815 ILCS 122/2-5). At the maximum, a $300 loan for 14 days costs $300 x 0.36 x 14 / 365 = $4.14, repaid as $304.14. APR = 4.14 / 300 x 365 / 14 = 0.36, or 36 percent. The 14-day term is legal because the Act's minimum is 13 days. A lender that charged more, including through fees, would be making a void loan it could not collect.
Run your own numbers with the cash advance calculator.
Consumer Protections and Who to Call in Illinois
- No non-bank lender may charge more than a 36 percent annual percentage rate on a consumer loan, calculated the way the federal Military Lending Act calculates it so that fees are included (815 ILCS 123/15-5-5).
- A loan that violates the 36 percent cap is null and void, and no one may collect, attempt to collect, receive or retain any principal, fee, interest or charges on it (815 ILCS 123/15-5-10).
- Lenders may not use any device, subterfuge or pretense to evade the cap, including disguised sale-leaseback deals or arranging loans through another party, and a violation is also a Consumer Fraud Act violation (815 ILCS 123/15-5-15 and 15-10-5).
- A payday loan may not exceed the lesser of $1,000 or 25 percent of your gross monthly income, may not be shorter than 13 days, and may not be rolled over (815 ILCS 122/2-5 and 2-30).
- You cannot be kept in payday debt for more than 45 consecutive days; after that the lender must give you a 7-day cooling-off period before any new payday loan (815 ILCS 122/2-5).
- You may cancel a payday loan by returning the proceeds by the end of the second business day, and once a loan has been outstanding 35 days you may enter a repayment plan with no additional finance charges, interest or fees (815 ILCS 122/2-5 and 2-40).
- A lender may charge only one returned payment fee of up to $25 per loan and may not use the criminal process to collect (815 ILCS 122, Article 2).
Complaints and licence checks go to the Illinois Department of Financial and Professional Regulation, Division of Financial Institutions: 888-473-4858, idfpr.illinois.gov/dfi.html, or file a complaint at the regulator's complaint page. The federal CFPB also takes complaints about any lender.
Online vs Storefront Lenders in Illinois
The 36 percent cap applies to any consumer loan made to an Illinois resident by any medium, and the IDFPR's consumer notice on the Predatory Loan Prevention Act says so directly: the law covers loans made over the internet and by telephone as well as in a store. An online lender needs an IDFPR license under the Payday Loan Reform Act or another Illinois lending law, must price at or under 36 percent, and must enter payday loans into the state database. The Act's anti-evasion section also reaches companies that arrange loans for someone else, which blocks the model where a website brokers a high-rate loan from an out-of-state lender. The practical consequence is that the high-cost websites still advertising to Illinoisans are either exempt banks or unlicensed operators, and a loan from an unlicensed operator above 36 percent is void under section 15-5-10. IDFPR tells consumers to deal only with lenders it licenses or that are federally regulated, and to check the license on its Division of Banking or Division of Financial Institutions pages before borrowing. Reports of violations go to the IDFPR complaint portal or the Attorney General's consumer line.
Alternatives If a Payday Loan Is Not the Right Fit
Since the cap took effect, the small-dollar market in Illinois is made up of lenders willing to lend at 36 percent or less: state-licensed installment lenders, banks and credit unions. Federal credit unions can offer Payday Alternative Loans, and Illinois credit unions and community lenders now have room to compete because the high-cost product is gone. The IDFPR press release announcing its consumer FAQ lists the loan types the cap reaches, from payday and title loans to wage advance products and buy-here-pay-here car financing, which means most of the credit an Illinois resident sees is priced within the same ceiling. Employer payroll advances and earned wage access programs are also covered by the cap when they charge a fee. If the need is a bill rather than cash, the Illinois Department of Human Services handles emergency assistance and LIHEAP, and calling the creditor for a payment arrangement before the due date costs nothing.
Compare the installment loan and payday alternative loan options before you decide.
Cities We Cover in Illinois
Frequently Asked Questions
Are payday loans legal in Illinois?
Yes, but only at 36 percent APR or less. The Predatory Loan Prevention Act, effective March 23, 2021, caps nearly all non-bank consumer loans at 36 percent all-in, and the Payday Loan Reform Act now carries the same limit. A payday loan priced above that is void and cannot be collected (815 ILCS 123/15-5-5 and 15-5-10).
What is the maximum payday loan amount in Illinois?
The lesser of $1,000 or 25 percent of your gross monthly income, under 815 ILCS 122/2-5. The loan must run at least 13 days and no more than 120 days, or 180 days for an installment payday loan. Lenders check a statewide database before lending to confirm you are within the limits.
What happens if an Illinois lender charged me more than 36 percent?
The loan is null and void under 815 ILCS 123/15-5-10, and the lender has no right to collect or keep any principal, interest or fees. IDFPR's guidance is that you do not have to repay such a loan. You can report it through the IDFPR complaint portal or the Attorney General's consumer fraud hotline.
Can I roll over a payday loan in Illinois?
No. Rollovers are prohibited by 815 ILCS 122/2-30. You also cannot be kept in payday debt for more than 45 consecutive days; once you reach that point the lender must give you a 7-day break before any new payday loan. After 35 days you may ask for a repayment plan with no added charges.
Do online payday lenders have to follow the Illinois 36 percent cap?
Yes. IDFPR states that the Predatory Loan Prevention Act covers consumer loans made in Illinois by any medium, including the internet and telephone, and the Act's anti-evasion section reaches companies that arrange loans for others. Only banks, savings institutions, credit unions and insurance companies are exempt.
Nearby States
WisconsinThe fee cap, a worked example and the regulator to call in Wisconsin.
IowaThe fee cap, a worked example and the regulator to call in Iowa.
MissouriThe fee cap, a worked example and the regulator to call in Missouri.
KentuckyThe fee cap, a worked example and the regulator to call in Kentucky.
IndianaThe fee cap, a worked example and the regulator to call in Indiana.
