Many people in Illinois struggle to keep their financial situation afloat. They often turn towards payday loans without knowing the risks involved. Payday loans are blessing in disguise for some and disaster for others. In order to maximally utilize the services of various payday services across Illinois one should be aware of the regulations within the state and one should have a clear reason to avail such services.
The regulations in Illinois are luckily such that they protect the borrowers from great debts and criminal actions. These regulations are customer friendly and strictly regulate the loan providers. As many as two outstanding loans are permissible in Illinois and rollovers are prohibited. These loans in Illinois are based on borrower’s ability to pay as per the state laws.
If the borrower is under debt for more than 35 days then according to Illinois law the borrower is entitled to enter into an interest free debt repayment plan with the loan agency. Lenders are also prohibited from issuing new loans to a candidate who has been in debt for more than 45 days. This helps to protect the customers from going into long term debts.
Payday loan rules in Illinois
The Annual percentage rate in Illinois is up to 400% and with such high rates the borrowers should be cautious before going for such loans as they may convert short term emergency situations into long term debt crisis. The maximum amount of loan permissible is $1000 or 25% of the gross monthly income. The loan term is 13 -45 days.
For a $100 loan the maximum finance rate is $15.5 for a 14 day loan which amounts to an APR of approximately 400%. As no rollovers are permitted the borrowers are greatly protected but this does not change the enormous amount APR that is charged.
When to choose payday loans ?
It is advised that such loans should be taken with an urgent motive like emergency car repair, medical bill payment or other unavoidable financial needs. The borrower must not be fascinated by faxless payday loans just because they are quick and paperless. If the borrower is cautious these loans can prove to be an asset for super urgent needs.
Other loan options in Illinois
Other options in Illinois include payday type loans in Illinois. These include small consumer loans and payday installment loans. Payday installment loans are high APR loans just like payday loans but with long term repayment options. Small payment loans is the latest addition in the Illinois loans (2011) which is the least expensive loan option available as its APR is regulated to be <99%. The small payment loans have longer terms than payday loans and its repayment option is spread over a period of one year or more.
These loans are cheap but such long terms can be a double edged sword as they are not for people who are looking for some quick cash and quick repayment within their next payday. So, such loan options may look fascinating (as APR is low) but they are not that cheap by any means and the burrower should ultimately have a clear purpose before choosing such loans.