Illinois Bill Means Payday Loan Restrictions

Anytime another state passes a law regarding payday loans and possible restrictions then you need to take notice. States have a knack for following each other if laws work out well, so any law a state passes could reach your state sometime soon. Payday loans are a big industry and a lot of money changes hands in them each year, which is why you need to pay attention to what is going on in the government aspect. The following is a bill that has been passed in Illinois that you need to know about. Do not turn a blind eye to what is going on, because you do not want to be caught off guard for your elections if there is a payday loan bill.

The Illinois Legislation

This is not really a new bill, but since we are coming up on November elections it is worth it to see what is going on. There has been a cap on Illinois payday loan rates. The amount that can be charged per $100 on a payday loan is capped at $15.50. The rate use to be as high as $40, which is almost half a $100 payday loan. This bill also has limited the amount of the loan to $1,000, or 25% of the monthly salary of the borrower, whichever is lower.

Consumers also face a seven day waiting period. Businesses now have to offer interest-free repayment plans for those who might have trouble paying back the loans. The goal is to make sure that people are not held down by an endless cycle of debt from these loans when their intent was to get some financial relief. The regulation looks to save people from financial hurt.

What This Means

This is not a good thing for the payday loan companies. Putting a cap on their interest means that they get less money, which means that they will often times have to lay off workers. However, these lenders get themselves into a mess when they rely too heavily on large interest payments from borrowers to stay afloat. A lot of people have trouble feeling sorry for these industries after they have spent years pushing people through cycles of debt just to get repayments.

For you, this is important. November is coming up and there are some states that have payday loan propositions on the ballot. You need to know what has worked for other states and what your state is looking to do. You need to make an informed decision based on knowing what has worked and what has not worked. Now is not the time to forget about this. You never know when you might need a payday loan, and you need to be protected if you ever have to get one.