Compare legal limits, fees and the true cost of small loans in your state before you talk to any lender. Compare legal limits, fees and the true cost of small loans in your state.
Illinois Loan Rules
High-cost payday lending is prohibited in Illinois under the Predatory Loan Prevention Act, which is enforced by IL IDFPR to protect residents from triple-digit interest charges. State law establishes a strict rate cap of 36% APR. Because a typical payday loan nationally charges about $15 per $100 for two weeks—or roughly 391% APR—short-term deferred presentment lenders cannot legally charge payday rates in Illinois. Any online payday loan offer advertising triple-digit rates exceeds Illinois legal limits, and a borrower must be at least 18 years old to sign a loan contract, as shown in the payday table below.
Borrowers in Illinois who need a small loan still have regulated, legal options that comply with state law. Licensed lenders can offer fixed-payment installment loans under the Illinois Predatory Loan Prevention Act / Consumer Installment Loan Act, where the maximum all-in APR is 36% for a $500 six-month loan, 36% for a $2,000 two-year loan, and 36% for a $10,000 five-year loan, as detailed in the installment table below. Federal credit unions also offer Payday Alternative Loans (PALs) ranging from $200 to $2,000 for 1 to 12 months, with a maximum 28% APR and an application fee up to $20 for members. Use the tables and links below to review every rule enforced by IL IDFPR and compare licensed lenders and credit unions in Illinois.
Payday loan rules in Illinois
| Legal status | Prohibited — rate cap 36% APR |
|---|---|
| Governing law | Predatory Loan Prevention Act |
| Fee or rate cap | Capped at 36% APR (PLPA 2021) |
| State regulator | IL IDFPR |
| Minimum borrowing age | 18 |
Installment loan rules and APR caps in Illinois
| Governing law | Illinois Predatory Loan Prevention Act / Consumer Installment Loan Act (815 Ill. Comp. Stat. 123/15-1-1 et seq.; 205 Ill. Comp. Stat. 670/1 et seq.) |
|---|---|
| Required license | Consumer Installment Loan License |
| Max all-in APR ($500 / 6 months) | 36% |
| Max all-in APR ($2,000 / 24 months) | 36% |
| Max all-in APR ($10,000 / 60 months) | 36% |
| Origination fee limit | Must be included within the 36% all-in MAPR cap |
| Credit insurance rules | Allowed with limits |
| State regulator | Illinois Department of Financial and Professional Regulation (IDFPR) |
Before you borrow in Illinois
- Verify the lender's license in Illinois. Confirm that the lender holds an active state license with IL IDFPR before sharing your bank account details or signing an agreement. You can also look up the company on NMLS Consumer Access (nmlsconsumeraccess.org), though not every state uses NMLS for every license type.
- Check the Truth in Lending disclosure box. Under the federal Truth in Lending Act and Regulation Z, every lender must give you a written disclosure showing the APR, finance charge, amount financed, and total of payments before you sign the contract.
- Compare the all-in APR and origination fee to state caps. Make sure the contract's all-in APR and any origination fee stay within the Illinois limits shown in the tables above, such as 36% on a $500 six-month installment loan under the Illinois Predatory Loan Prevention Act / Consumer Installment Loan Act. Covered active-duty servicemembers and their dependents are protected by the federal Military Lending Act, which caps covered credit at 36% Military APR.
- Review your right to cancel and payment stop protections. Check the payday table above to see how rescission (your right to cancel a loan shortly after signing) works in Illinois. If you set up recurring electronic bank debits, federal Regulation E lets you stop preauthorized withdrawals by notifying your bank at least 3 business days before the scheduled debit, though this does not cancel the debt.
- Check credit union Payday Alternative Loans (PALs). Before taking a higher-cost non-bank loan, see if you qualify for membership at a credit union in Illinois. Under NCUA rules, federal credit union PALs offer $200 to $2,000 for 1 to 12 months with a maximum 28% APR and an application fee of up to $20.
How online and tribal lenders fit Illinois law
Online lenders making consumer loans to residents of Illinois generally must be licensed by IL IDFPR and obey the rate caps set by the Predatory Loan Prevention Act and the Illinois Predatory Loan Prevention Act / Consumer Installment Loan Act, regardless of where the lender is located. You can check whether a website is operated by a licensed lender by contacting IL IDFPR in Illinois or searching NMLS Consumer Access (nmlsconsumeraccess.org), though not every state uses NMLS for every license type. Some online lenders claim tribal sovereign immunity and argue that Illinois usury caps and licensing laws do not apply to their loans. Federal appeals courts have reached different results on tribal immunity in online lending: several decisions (2nd Circuit in 2014 and 2019, 4th Circuit in 2021, and 7th Circuit in 2021) supported states and the CFPB, while one decision (4th Circuit in 2019) found a lender protected by immunity.
Small-dollar lending in Illinois by the numbers
- Residents
- 12,692,601
- Median household income
- $87,400
- Loan company offices
- 140
- Loan companies
- 8
- Bank branches
- 3,628
- Banks
- 384
- Credit unions
- 175
- Pawn shops
- 263
Sources for Illinois counts: Financial provider totals come from our state directories, compiled using FDIC data for banks and bank branches, NCUA data for credit unions, company websites and public map listings for loan companies and offices, and Overture Maps data for pawn shops. Resident population and median household income figures come from the U.S. Census Bureau.
Detailed Illinois loan guides and local directories
Where to file a lending complaint in Illinois
If a lender operating in Illinois charges more than the statutory cap, lends without a required state license, ignores your right to cancel, or uses unlawful collection tactics, save copies of your loan contract, Truth in Lending disclosures, and payment records. You can submit a formal complaint to IL IDFPR in Illinois and to the federal Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov. Be aware that no lender or debt collector can have you arrested or jailed for an unpaid consumer debt.
Loan rules FAQ: Illinois
Are payday loans legal in Illinois?
No, high-cost payday loans are prohibited in Illinois under the Predatory Loan Prevention Act, which is enforced by IL IDFPR across the state. State law sets a rate cap of 36% APR, making triple-digit deferred presentment loans unlawful to offer to Illinois residents.
What is the maximum APR on an installment loan in Illinois?
Under the Illinois Predatory Loan Prevention Act / Consumer Installment Loan Act, the maximum all-in APR on an installment loan in Illinois depends on the loan amount and repayment period. State rules set the limit at 36% for a $500 six-month loan, 36% for a $2,000 two-year loan, and 36% for a $10,000 five-year loan. Check the installment table above for specific rules on origination fees and credit insurance enforced by IL IDFPR in Illinois.
What is the minimum age to take out a small loan in Illinois?
You must be at least 18 years old to enter into a valid small-dollar loan contract in Illinois. This minimum borrowing age applies to both storefront locations and online lenders serving Illinois residents. Lenders will ask for government-issued identification to verify your age before issuing Truth in Lending disclosures.
Who regulates small-dollar lenders in Illinois?
Non-bank payday and installment lenders in Illinois are licensed and supervised by IL IDFPR under state law. Borrowers can verify a lender's license status by contacting IL IDFPR directly or by searching NMLS Consumer Access at nmlsconsumeraccess.org, though not every state uses NMLS for every license type. At the federal level, the Consumer Financial Protection Bureau (CFPB) also oversees federal lending disclosures and collection practices.
What should I do if a lender in Illinois charges more than the law allows?
If a lender charges fees or an APR above the legal limits in the Predatory Loan Prevention Act or the Illinois Predatory Loan Prevention Act / Consumer Installment Loan Act, gather your loan agreement, Truth in Lending disclosure box, and bank statements. Report the violation to IL IDFPR in Illinois and file a complaint with the Consumer Financial Protection Bureau at consumerfinance.gov. Remember that you cannot be arrested or jailed for an unpaid consumer debt.
How do I stop a lender from taking automatic payments from my bank account?
Under federal Regulation E, you have the right to stop preauthorized recurring electronic debits by telling your bank or credit union at least 3 business days before the scheduled transfer date. Your bank may ask for written confirmation within 14 days of an oral request, and you should also notify the lender in writing that you are revoking authorization. Stopping automatic bank debits prevents further withdrawals, but it does not cancel the debt.
Small-dollar loan rules in neighboring states
How we get our numbers: We review the Predatory Loan Prevention Act, the Illinois Predatory Loan Prevention Act / Consumer Installment Loan Act, and published rules from IL IDFPR in Illinois to summarize statutory loan limits and licensing rules. For installment loans, we use the maximum all-in APR—including interest, origination fees, and permitted administrative charges—for three standard benchmarks ($500 for 6 months, $2,000 for 24 months, and $10,000 for 60 months), based on state statutes and the state-by-state surveys of the National Consumer Law Center (NCLC). Your CU Partner is an independent educational website, not a lender or loan broker, and does not provide legal advice. Because laws and regulatory interpretations change, please confirm current rules with IL IDFPR before borrowing.
Sources: Consumer Financial Protection Bureau (CFPB); National Credit Union Administration (NCUA); NMLS Consumer Access; Electronic Code of Federal Regulations — Regulation Z (12 CFR Part 1026); U.S. Census Bureau; National Consumer Law Center (NCLC).