Learn about how cash advances work in Chicago before you apply.
If you have less than perfect credit and find yourself in a financial emergency, you might be looking for an alternative to traditional bank loans. A payday loan, or cash advance, could get you through this rough patch, but understanding how these types of loans work is important. This guide will give you the information you need to make your decision. The most important thing to keep in mind is that a payday loan is a temporary fix, not a long-term solution.
A selection of payday loans you can apply for
Are cash advances legal in Chicago?
Yes, cash advances in Chicago are legal. Illinois statutes govern the functioning of payday lenders in this city. Some of the regulations include:
- The terms of a cash advance in Chicago cannot be less than 13 days and can’t be more than 45 days.
- Payday lenders can also offer payday installment loans, which involve you paying off your loan in installments. These loans can have terms of between 112 and 180 days.
- The maximum you can borrow through a payday loan in Chicago is limited to 25% of your gross monthly income, or $1,000, whichever is smaller.
- You cannot take out more than two cash advance loans at a time.
What should you consider when taking out a cash advance in Chicago?
Payday loans for the Chicago market typically include these features:
- Apply in-store or online. You can easily apply for a payday loan online. While there are several payday lenders that have physical locations, the online world presents more options.
- Get money quickly. Whether you apply in-store or online you can expect to get your hands on the approved funds quickly. With an in-store loan you can receive the money immediately after a lender approves your application. With an online loan you would typically have to wait one business day before the money makes it to your bank account.
- Use the money for any purpose. You can use proceeds from a cash advance in Chicago for any legitimate purpose such as paying medical bills, repairing your car or simply getting by until your next paycheck.
- Apply with bad credit. Getting a traditional loan can be a problem if you have a poor or bad credit history, but this is not the case with most payday lenders. If you can demonstrate an ability to repay the loan, you will likely be approved for a cash advance.
- Limit on amount of cash advances. You cannot take out more than two cash advances at one time in Chicago, and there needs to be a seven-day cooling-off period after 45 consecutive loan days.
What fees can I be charged with a cash advance in Chicago?
Getting a cash advance in Chicago is more expensive than getting a traditional loan. These are the general rates and fees that apply to cash advances:
- Finance rate and fees. The finance charge for a 14-day $100 cash advance cannot exceed $15.50. The maximum annual percentage rate (APR) for a 14-day $100 cash advance is limited to 403%. If you take out an installment payday loan it should be fully amortizing, meaning it needs to be paid off in full by paying equal installments by the end of the loan term.
- Collection fees. If your bank account does not have sufficient money to honor a debit or check payment, your lender can charge a collection fee. This is limited to $25. The lender cannot process a check or debit more than twice, and cannot charge this fee more than once.
- Rollover fee. Illinois state laws don’t allow payday loans to be rolled over.
How can I apply for a cash advance in Chicago?
You can apply for a cash advance in Chicago online or by visiting a storefront. In either case, you’ll have to meet the following eligibility criteria:
- You are at least 18 years old
- You have a regular source of income
- You are an American citizen or a permanent resident of the U.S.
- You have documentary evidence to prove you are a resident of Illinois
In order to complete the application successfully, you will need to supply the following information:
- Your name, date of birth and Social Security number
- Details from an acceptable form of ID such as your passport or driver’s license
- Your employment details
- Details about your income and expenses