A Guide to Illinois Payday Loans
A payday loan is a short - term fast cash loan that does exactly what it sounds like; it lets you borrow money that you need until your payday comes. A payday loan is a solution when more conventional loan options such as bank loans or credit cards will not work in your situation.
Payday loans are much faster to obtain than other kinds of financing. It is faster to get a payday loan than to apply for a bank loan. It is faster to get a payday loan than to apply for a credit card, or even to request and receive a cash advance if you already have a card. In most cases, when you take out a payday loan, you are able to get the money that you need right away. This makes payday loans a good solution when you have a pressing expense that you need to pay right away.
Payday loans are also easier to obtain for people who have had credit issues and who have low credit scores or who have no credit history. Unlike most types of credit cards and loans where you have to undergo a credit check, you do not have to do this for a payday loan. Instead, you can qualify for a payday loan just as long as you have a regular steady job and a bank account that you can provide the information for.
Finally, payday loans are a solution for those who just need to borrow money for a short period of time. When you take a payday loan, the idea is that you will repay this loan at your next paycheck. Most other kinds of loans have a longer term of repayment, which may not be necessary if you just need a little bit of cash to meet an immediate expense.
Payday loans are a unique offering because they meet all these purposes. Unfortunately, payday loans charge you a lot of money to take advantage of the benefits they provide. You will need to pay a high fee to borrow the money.
The cost of borrowing money is expressed in terms of the annual percentage rate, or APR, no matter whether you borrow the money for a year or whether you borrow only for a week or two. This makes it possible to compare different kinds of lending products. To compare and see how expensive payday loans are, consider that the average credit card generally has an APR below 30 percent but the average payday loan APR typically is around 450 percent or more.
Illinois Laws on Payday Loans
Some states regulate payday loans while others make them illegal. Illinois is one of the states that regulate them. Illinois addresses payday loans in 815 ILCS 122/1 - 1 seq. 2011.
Under the laws Illinois fast cash lender loans are permitted to loaning the lesser of $1,000 or 25 percent of your gross monthly income. The term of the loan may be between 13 and 45 days. The lender is permitted to charge you a fee of $15.50 for each $100 that you borrow. This works out to an annual percentage rate (APR) of 403 percent. You are allowed to have up to two different payday loans out at one time and there are no rollovers of payday loans permitted by law. There is also a 7 - day cooling off phase after 45 consecutive days of having a loan.
Keep Informed About Payday Loans in Illinois
Understanding your legal rights and the legal protections available to you is important when you enter into any financial transaction. With knowledge of the limitations placed on fast cash Illinois lenders, you can make sure that the loan you take complies with the law. You can also make a more informed choice about whether a given loan product will work for your needs.