Illinois Cash Advance Consumer Resource

Over the past several years, the economy has been less than stellar, creating more and more problems for the middle and working classes and stimulating growth of payday loans, a simple and easy method of securing a cash advance in Illinois. What many do not realize is that, while these loans do offer upfront cash with a fraction of the paperwork compared to a bank, they often do so at incredibly high interest rates that often only lead to more debt.

Payday Loans: Are They Worth It?

Payday loans are alluring because of how quickly they can deliver cash into your hands, but the finance charges attached by some lenders can make it nearly impossible to pay off these short-term loans. In order to receive a cash advance in Illinois through a payday loan, you only need to prove that you are currently employed, that you possess an active bank account and that you are whom you claim to be with some form of identification. Once that is cleared away, you write a postmarked check, to be cashed at the end of the loan period, for the amount of the loan and a financing charge. If you cannot repay the loan at the end of the period, the lender will cash the check, which can result in an overdraft fee from your bank, costing you even more money. When you reach the end of a payday loan period, you do have the option of using a rollover, which is really just taking out another loan to pay a previous one. With a rollover though, the new principal is the previous principal combined with any finance charges, plus a brand new finance charge for the rollover loan.

Illinois Seeks To Protect Its Residents

Though payday loans through some lenders are not the best choice, if you find yourself desperately in need of one, it is not all bad news. While some states are very liberal in the way they allow payday lenders to do business, Illinois is not counted in that group. If you are searching for a cash advance in Illinois, there are several protective measures that have been taken by the state government. Many states allow a finance charge of $15 to $30 for every $100 borrowed, which ends up making the interest rate astronomically high. Illinois however, only allows $15.50 on each $100 borrowed. Further supplementing that, the finance charge itself can only go as high as $35, meaning only the first $300 can actually receive a fee. Considering that you can take a payday loan of up to 22.5% of your gross monthly income, a considerable amount of money can be borrowed without high finance charges.

A limitation has  been placed on the amount of debt that any single person may have with payday lenders. If a new loan would bring your total debt above $400, then the lender is legally obligated to deny you the loan. Also, regardless of how much debt you have, no lender is allowed to issue you a third payday loan, even if the others are with different lenders. Though this may seem restrictive of your rights as a consumer, it is done because of the nature of payday loans and the way they have trapped millions of people in debt.

What You Can Do To Protect Yourself

Though the government has enacted regulations to help protect you and your credit score, there are also steps you can take to avoid becoming entangled in debt when signing into a payday loan. If you have signed a contract, but wish to cancel it, you legally have until the end of the following business day to nullify it. There are a number of tactics that some payday lenders will use to try and coerce payments from you, and the majority of them are downright illegal. At no point can you ever be criminally prosecuted for failing to pay a loan back. It is a civil matter, not criminal, and though you may be charged in that way, it will never be as a criminal. Even the threat of using the criminal process is against the law for a payday lender to make. In addition to these infractions, if any of the above limitations are not followed, you should immediately seek legal advice. Not only will you be helping to stop a lender from taking advantage of you and other borrowers, depending upon the kinds of violations, you might not have to repay the loan or you may even be paid by the offending lender. Perhaps the most important thing you can do, though, is to work on increasing your savings and keep a careful eye on your finances to avoid using payday loans any more than absolutely necessary.

Regardless of what your situation is or how you got there, when obtaining a cash advance in Illinois, it is important to know the rules and regulations of payday loans so that you can successfully avoid being trapped in debt by them. Always seek out the advice of others, including non-profit credit counselors in your area that may direct you to other alternatives that cost less and are less risky. As a citizen of Illinois, you pay taxes that fund such services and you are cheating yourself out of sound advice if you do not take advantage of them.