What You Need to Know About Illinois Payday Loans?
Payday lenders market their products as convenient solutions to temporary cash-flow problems. Don’t buy the hype. If you’re struggling to make ends meet, chances are you’ll be even worse off if you take out a payday loan.
Payday loans are an extremely expensive form of borrowing money. They often carry triple-digit interest rates and include all kinds of hidden fees. One payday loan can quickly snowball into too much debt for one family to handle. Many payday borrowers come up short on their loan’s due date, so they must take out a new loan to pay off the old one. Or sometimes, lenders will offer consumers additional cash if they take out a new loan to pay off the old one. This is called “rolling over” a loan. Each time a loan is rolled over, the lender tacks on additional fees. This creates a cycle of debt from which some families never recover.
With their extremely high interest rates, payday loans can quickly transform a short-term financial crisis into a long-term debt problem. You should exhaust all possible resources – family, church, friends – before you even consider taking out one of these high-cost loans.
Payday lending is considered legal in the state of Illinois
Maximum Illinois payday loans amount is $1000 or 25% of the consumer's gross monthly income. However, there are certain restrictions with which all the lending businesses, borrowers should comply.
Basically, these regulations concern the amounts of fee limits and so on. In the state of Illinois there are a lot of changes in the sphere taking place at the moment and all of them are to take care of borrowers.
In Illinois any criminal actions against borrowers are prohibited; only repayment plan can be offered to those people who are unable to repay their debts in time. It is also stated in the law that 28 days should pass before a lender can sue a borrower for a default repayment.
However lenders are not in the right to take possession of a borrower's belongings instead of the repayment nor are they allowed to be awarded damages to cover attorney's fees or any of the court costs.
Under Illinois law, consumers enjoy stronger protections from the payday loan industry’s worst practices. Illinois law protects consumers from unlimited roll-overs and requires loans to be based on a borrower’s ability to pay. The law, passed in 2011, also created a new type of loan – the small consumer loan– that is somewhat less expensive than the traditional payday product. Still, even with these new protections in place, consumers must exercise caution when deciding whether to take out a loan to meet their emergency expenses. The cost of short-term borrowing in Illinois remains very high.
Consider Other Options
With their extremely high interest rates and many charges and fees, small consumer loans, payday installment loans, and payday loans can quickly transform a short-term financial crisis into a long-term debt problem. You should exhaust all possible resources – family, church, friends – before you even consider taking out one of these high-cost loans.
For more information about these loans and other types of credit, or to file a complaint against a payday lender, please visit www.IllinoisAttorneyGeneral.gov or contact the Illinois Attorney General’s Consumer Fraud Bureau at 1-800-243-0618 (TTY: 1-877-844-5461) and Other illinois Payday Loans Law.