Payday Loans in Illinois: Laws, Costs, and Your Options (2026)

Payday loans in Illinois are legal only at 36% APR or less. The Predatory Loan Prevention Act, 815 ILCS 123, took effect March 23, 2021 and capped consumer loans at 36%, with most fees counted in the rate, and it made any loan over the cap void. In the Act’s statement of purpose, the legislature cited the Department’s 2020 report that the average Illinois payday loan APR is 297%, and payday lending volume collapsed once the cap took effect. This page covers what the law allows, what a legal loan costs, your rights if a lender breaks the cap, and which of the lenders we review serve Illinois. For how Illinois compares with every other state, see payday loan laws by state.

Illinois payday loan rules at a glance

Rule	Illinois
Legal status	Permitted only at 36% APR or less (Predatory Loan Prevention Act, 815 ILCS 123, effective 2021)
Regulator	Illinois Department of Financial and Professional Regulation (IDFPR), (888) 473-4858
Rate cap	36% APR, calculated like the federal Military Lending Act’s MAPR, which counts most fees
Over the cap	Loan is null and void; no right to collect principal, interest, or fees (815 ILCS 123/15-5-10)
Term	At least 13 days, and no loan may leave you in payday loan debt for more than 45 consecutive days (815 ILCS 122/2-5(a), (b))
Loans at a time	No more than two, checked against a real-time state database
Payment limit	Payments due in a month capped at $1,000 or 25% of your gross monthly income, whichever is less
Between loans	7-day wait after 45 consecutive days in payday loan debt
If you cannot pay	After 35 days, a no-cost repayment plan of at least 4 installments over up to 90 days
Criminal charges	Prohibited; the contract must say so in 14-point bold type
Online lenders	Covered, including out-of-state lenders and bank partnerships (815 ILCS 123/15-5-15)

How the 36% cap works in Illinois

The Predatory Loan Prevention Act applies to any consumer loan in Illinois from a lender that is not a bank or credit union. The 36% is not just the interest rate: it is calculated as the federal Military Lending Act calculates its Military Annual Percentage Rate, which counts most fees and charges along with interest. A lender cannot get around it with an application fee, a membership fee, or a “maintenance” charge.

The older Payday Loan Reform Act, 815 ILCS 122, is still in force, and the 36% cap was written into it. A licensed payday loan in Illinois must run at least 13 days, no loan may leave you in payday loan debt for more than 45 consecutive days, you can have no more than two at once, and the payments due in any month cannot exceed $1,000 or 25% of your gross monthly income, whichever is less. The lender must check the state’s real-time database before lending, and after 45 consecutive days in payday loan debt you must wait seven days before taking another. The law also bars using one payday loan to pay off another.

Illinois lenders can still make larger installment loans under the Consumer Installment Loan Act, up to $40,000, and those are capped at 36% too.

What a payday loan costs in Illinois

	Amount
Borrowed	$500
Term	30 days
Most it can cost at the 36% cap	About $15
Cost at the 297% average APR the Department reported in 2020	About $122

These are our own arithmetic, not a quote. The difference is the reason the payday market shrank so quickly.

Worked costs at the 36% cap

Before March 23, 2021, an Illinois payday lender could charge up to $15.50 per $100 borrowed, which IDFPR puts at an APR of about 404%. On a $300, 14-day loan that was $46.50. At 36%, a single-payment loan can cost at most the amount times 0.36 times days divided by 365, so you can check any quote yourself:

Single-payment loan	Old limit ($15.50 per $100)	Most at 36% APR (amount x 0.36 x days / 365)
$300 for 14 days	$46.50	$4.14
$500 for 30 days	$77.50	$14.79
$1,000 for 90 days	n/a (term over 45 days)	$88.77

For an installment loan the interest is spread across payments. At 36% (3% a month) a $1,000 loan repaid over 6 months has payments of $184.60 and costs $107.59 in total interest. A $2,000 loan over 12 months has payments of $200.92 and costs $411.09. These are our own calculations from the standard amortization formula and assume no fees outside the 36%, since the cap counts most fees. If your Truth in Lending box shows more, the loan is above the cap. The old-limit column uses IDFPR’s figure from its 2021 Trends Report; the old limit applied to payday loans of 14 to 45 days.

What IDFPR’s data shows about the cap

IDFPR’s Division of Financial Institutions publishes an annual Trends Report built from the state’s loan database. The 2021 report, released with a January 5, 2023 press release, tracks four high-cost products: payday loans, installment payday loans, title-secured loans, and small consumer loans. It reports:

Year	Payday loans made	Payday loan principal	All four products, loans	All four products, principal
2019	163,673	$62.0 million	1,042,118	$1.01 billion
2020	91,952	$35.1 million	637,183	$661.8 million
2021	49,954	$24.1 million	122,767	$114.9 million

• Part of 2021 predates the cap. The Act was signed March 23, 2021, and the report tracks title and small consumer loans only through that date, so the 2021 row mixes pre-cap and post-cap months. Our table reads the report’s numbers; it does not isolate the post-cap months.
• Fewer lenders. The report says the number of Consumer Installment Loan Act licenses dropped 43% and Payday Loan Reform Act licenses 95% after the Act, and that most surrendered licenses belonged to high-cost payday and auto title lenders. IDFPR counted 900 active Consumer Credit Section licensees at the end of 2021.
• Who borrowed. Across 2012 to 2021, payday loans in the database averaged $347.04 for 18.9 days with $51.61 in fees, an average APR of 287%, and the average payday borrower’s gross monthly income was $3,143.24.
• Limits of the data. The report does not capture unlicensed lending, pawn loans, or loans by banks and credit unions. We found no later IDFPR report with comparable year-by-year payday figures, so this page does not extend the trend past 2021.

How to check an Illinois lender’s license

IDFPR says to check the state’s database of licensed companies before you borrow, and that a lender not on the list “may not have the legal authority to make a loan to an Illinois consumer,” though some lenders and loans are exempt from licensing.

1. Open IDFPR’s DFI license lookup.
2. Under Consumer Credit Section, choose Consumer Installment Lenders or Payday Lenders, whichever fits the loan, and search by the lender’s name.
3. Compare the licensed name with the name on your loan paperwork. If the lender will not give you a license number or is not listed, stop.
4. Questions go to IDFPR’s Consumer Credit Section at 312-814-5145 (Chicago) or 217-785-4244 (Springfield), or [email protected]; IDFPR’s main line is (888) 473-4858, and complaints can be filed on idfpr.illinois.gov.

IDFPR’s consumer brochure also says that if an unlicensed lender makes a loan that required a license, the consumer “does not have to repay principal, interest, or any fees associated with that loan.” Loans made before March 23, 2021 at rates above 36% still have to be repaid, according to the same brochure.

Online lenders and void loans

Section 15-5-15 applies the cap to anyone who makes, arranges, or acquires a loan to an Illinois consumer, including by internet, and to any arrangement designed to evade the law. It also looks past the paperwork: if a lender uses a bank as the nominal lender but holds the predominant economic interest in the loan, the lender is treated as the lender. A loan that breaks the cap is void, and the lender has no right to collect or keep any principal, interest, or fee. If an online lender offers you a triple-digit APR in Illinois, check its license with IDFPR before you sign, and report it if it has none. For lenders that cite tribal affiliation, see tribal loans and sovereign immunity.

Your rights at the counter

1. A licensed lender. Check the IDFPR license lookup or call (888) 473-4858.
2. 36% APR, fees included. Any consumer loan priced above it, from a lender that is not a bank or credit union, is void.
3. No more than two payday loans at a time, and monthly payments capped at $1,000 or 25% of your gross monthly income.
4. A repayment plan if you need one. After 35 days in debt, a no-cost plan of at least four installments over up to 90 days.
5. No criminal prosecution. The contract must say, in 14-point bold type, that you cannot be prosecuted in criminal court to collect the loan. The returned-check charge is capped at $25.
6. The federal Truth in Lending box. The APR, finance charge, amount financed, and total of payments must be disclosed before you sign.

What happens if you cannot repay

Ask for the repayment plan: once you have been in debt 35 days, a licensed payday lender must offer at least four installments over up to 90 days at no added cost. The lender can still pursue an unpaid balance as a civil debt. Read what happens if you default on a payday loan for how collection works, and how to escape the payday loan cycle if one loan keeps leading to the next. If the real problem is a bill you cannot cover, start with what to do when you can’t make this month’s payment. If a lender charged you more than 36%, file a complaint with IDFPR.

Alternatives worth trying first in Illinois

Employer pay advances, credit union small-dollar loans, utility and medical payment plans, and local assistance programs are covered in payday loan alternatives that actually work. Credit unions are the other Illinois route. Under the National Credit Union Administration’s rule, 12 CFR 701.21(c)(7)(iii), a federal credit union can make a Payday Alternative Loan (PAL I) of $200 to $1,000 with a term of one to six months, an application fee of no more than $20, and no rollovers; you must have been a member for at least one month. PAL II loans can be up to $2,000 with a term of up to 12 months and no minimum membership period (12 CFR 701.21(c)(7)(iv)). The rate may run 10 percentage points above the NCUA Board’s ceiling for federal credit union loans, which the Board extended at 18% through September 10, 2027, so a PAL can carry up to 28% APR (our arithmetic from those two figures). A credit union may make no more than three such loans to one borrower in six months. State-chartered credit unions follow their own rules, so ask.

If you are comparing installment loans, installment loans vs. payday loans explains how to compare total cost.

If you do borrow, check the APR in the Truth in Lending box against the 36% cap, confirm the lender’s Illinois license, and walk away from any offer that exceeds it.