Are payday loans illegal in Illinois?

Not technically illegal, but the PLPA's 36% APR cap makes the traditional payday loan fee structure unprofitable for most lenders, so licensed storefront payday lenders have effectively stopped operating in Illinois. The IDFPR reports that nearly every high-cost payday lender has surrendered its Illinois license since the cap took effect.

What happens if a lender charges more than 36% APR in Illinois?

The loan is null and void under the PLPA, meaning the lender has no legal right to collect principal, interest or fees on it. The IDFPR can also fine violators up to $10,000 per violation.

Is there a cap on pawn loans in Illinois?

Yes, but pawnbrokers are governed by the Pawnbroker Regulation Act of 2023 rather than the PLPA. That law allows pawnbrokers to charge monthly finance charges of up to 20% of the loan amount for small pawns under $500 — equivalent to as much as 240% APR — so it's worth comparing other options before using a pawn shop.

Can online lenders ignore Illinois's 36% cap?

Some out-of-state and online lenders have tried to use partnerships with banks in other states or tribal immunity arrangements to charge Illinois residents rates above 36%. The PLPA has anti-evasion provisions intended to address these arrangements, but enforcement isn't always straightforward. If you're offered a loan above 36% APR, check whether the lender is licensed with the IDFPR before signing.