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Illinois · checked October 24, 2026

Payday loans in Illinois: the rules and your way out

Typical payday loans not allowed

The Payday Loan Reform Act still exists, but since March 23, 2021 every payday loan is capped at 36% APR (military APR method), and any loan made above that rate is null and void, so the typical high-fee payday loan is unlawful in Illinois.

Law: Payday Loan Reform Act, 815 ILCS 122/1-1 et seq.; Predatory Loan Prevention Act, 815 ILCS 123/15-1-1 et seq. (P.A. 101-658, eff. 3-23-2021). ILCS text on ilga.gov as read 2026-10-24; it includes amendments through P.A. 104-852 (eff. 8-21-2026, which amended 2-10). Core payday terms were last amended by P.A. 101-658 (eff. 3-23-2021).

Illinois's rules, line by line

Largest loan
No fixed dollar cap. A lender may not make a payday loan if the payments due in the first calendar month, together with the borrower's other payday loan payments due that month, exceed the lesser of $1,000 or 25% of gross monthly income (815 ILCS 122/2-5(e)).
Shortest term
13 days (815 ILCS 122/2-5(a)).
Longest term
120 days. A 'payday loan' is defined as a loan with a term that does not exceed 120 days (815 ILCS 122/1-10).
Fee or rate cap
A lender shall not contract for or receive a charge exceeding a 36% annual percentage rate on the unpaid balance of the amount financed, calculated using the military APR method of 32 CFR 232.4 (815 ILCS 122/2-5(e-5); 815 ILCS 123/15-5-5 applies the same 36% cap to all consumer loans).
Renewals and rollovers
Prohibited. 'Rollover of a payday loan by any lender is prohibited' (815 ILCS 122/2-30); a repayment plan under 2-40 is not a rollover.
Waiting period between loans
If a consumer has had payday loans outstanding for more than 45 consecutive days, no payday lender may make a new loan until 7 calendar days after all payday loans from that 45-day period are paid in full (815 ILCS 122/2-5(b)).
Loans at once
2. No loan may be made to a consumer who has an outstanding balance on 2 payday loans (815 ILCS 122/2-5(e)).
Payment plan if you cannot pay
Yes, required and free. If the consumer has had one or more payday loans outstanding for 35 consecutive days, the loan outstanding on day 35 must be put on a repayment plan if the consumer asks. The consumer has until 28 days after the loan's default date to ask. The lender must prepare the plan within 48 hours. Terms: no charge for the plan; no finance charges, interest or fees except one NSF fee; at least 4 equal installments at least 13 days apart; plan may not exceed 90 days; first payment at least 13 days after signing; prepayment allowed at any time (815 ILCS 122/2-40). Refusing or delaying a repayment plan is a prohibited act (815 ILCS 122/4-5(16)).
State loan database
Yes. Lenders must verify eligibility through a Department-certified consumer reporting service database with real-time access and update it the day a loan is made, a repayment plan is elected, and the loan is paid (815 ILCS 122/2-15). The operator's name is not given in the statute.
Limits on collection
One NSF fee of up to $25 per check or debit, and the item may be presented no more than twice (815 ILCS 122/2-10(a)). After default, no finance charges, interest or fees other than that one NSF fee (2-45(b)). No lawsuit or arbitration until 28 days after the default date (2-45(a)). Lenders may not threaten or use the criminal process, charge attorney fees, court costs or arbitration costs, collect treble damages, or charge delinquency fees (4-5(1), (14), (15), (17)). The loan agreement must state 'You cannot be prosecuted in criminal court to collect this loan' (2-20(b)(4)). Military borrowers: no wage garnishment, collection deferred during combat deployment, and no contacting the chain of command (2-50). Any loan made in violation of the Predatory Loan Prevention Act is null and void, and no one may collect principal, fees, interest or charges on it (815 ILCS 123/15-5-10).
Other rights
Right to cancel future payment obligations without cost by the end of the second business day after signing, by telling the lender in writing and returning the principal (815 ILCS 122/2-25). Prepay at any time in increments of $5 or more without penalty (2-35(g)). Refund of unearned finance charge on payoff, actuarial method or better (2-5(e-5)). Holders of the check or contract take it subject to the borrower's claims and defenses (2-35(d)). A material violation is also a violation of the Consumer Fraud and Deceptive Business Practices Act (4-10(b)).

If you are behind on a payday loan in Illinois

  1. Check whether the loan was legal to make. Illinois does not allow payday loans at typical payday prices. If a lender charged more than the state's limit, report it to the Illinois Department of Financial and Professional Regulation (IDFPR), Division of Financial Institutions through its complaint page.
  2. Stop the automatic withdrawals if they are emptying your account. You can revoke the lender's permission to debit your account and tell your bank. How to do it.
  3. Look at a credit union payday alternative loan. Federal credit unions can lend $200 to $2,000 at much lower cost. How they work.
  4. Talk to a nonprofit credit counselor. A counselor can look at all your bills, not just this one. How to find a real one.

Check a lender, or report one

Sources

This page summarizes the law; it is not legal advice. Laws change, and the statute and regulator control. If something here is out of date, write to hello@paydayloan.help.

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