Illinois Payday Loan Laws and Legislation
Under the term of payday loans are understood cash advances given for a short period of time for a fee and including interest rates. The latter can reach pretty high levels and therefore put borrowers in a very unfavorable position. The state of Illinois is very concerned about its residents and there are a lot of measures being taken in order to protect the borrowers. Payday lending is considered legal in the state; however, there are certain restrictions with which all the lending businesses, borrowers and collectors 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.
According to the laws of Illinois a person is allowed to take a payday loan in the amount that does not exceed $1,000 and that is 25% of his monthly income before taxes. It is forbidden to take more than 2 loans at a time.
In Illinois you one can take a loan for a term from 13 up to 45 days. Rollovers are prohibited especially if it is meant to extend the repayment period of another payday loan. Cooling-off period means that you have to wait 7 days after 45 days of having a loan. Otherwise you will not get the next loan.
Payday loan fees should not exceed $15.50 per $100 borrowed. 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.
This year there have been several changes in the payday lending business legislation introduced by General Assembly of Illinois. This new bill has got an aim to reduce the amount of wage theft. New Illinois lending law is named HB 537 and it was passed by both houses of the legislature. It reads that charges more than 99% of interest will be considered illegal from now on. Moreover, the amount of loan will be tied to the amount of a borrower's income in the first place. This is a bit of a real improvement as long as lenders in the state of Illinois will no longer be allowed to charge interest at a 3-digit APR.
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