Many people find themselves struggling to make ends meet when it comes to their finances. Some people turn to payday loans to try to keep afloat, but are often unaware of the risks involved. With interest rates often in the triple digits, the debt from one payday loan can quickly pile up so that consumers get into a cycle of repeatedly rolling over their loans.
Fortunately, Illinois law has regulations on payday loans to protect people from getting stuck in the endless cycle of rolling over loans. There are three types of loans to choose from in Illinois.
A Small Consumer Loan is the least expensive type of loan because it requires lenders to charge an annual percentage rate of no more than 99%. With longer terms of about a year or more, these loans give people more time to pay down their balance. Lenders are prohibited to roll over a loan within the first 75 days of the loan's term and monthly payments cannot exceed 22.5% of a person's gross monthly income.
Payday Installment Loans can last up to six months and can have an APR that runs up to 400%. These loans cannot be rolled over if it keeps the borrower in debt longer than six months. Monthly payments cannot exceed 22.5% of a person's gross monthly income.
A Payday Loan must be paid back in two to four weeks. The loan's APR could be as high as 400%. Borrowers have the right to enter into an interest-free repayment plan with the lender if they've been in debt for more than 35 days. Additionally, a lender cannot give someone a new payday loan if it would put them in debt for more than 45 days consecutively.
Payday loans can be an expensive route to take, but Illinois law seeks to relieve some of the strain that is often associated with these types of loans. However, consumers should still weigh all of their options before deciding on a payday loan.
There may be times when you have unexpected expenses and need some extra money before payday. If you do not have enough money in a savings account or qualify for a conventional bank loan, you may be able to get the money you need with a cash advance called a payday loan.
Even though pay day loans are more expensive because they pose greater risks for the lenders, they may offer the only way for you to meet your needs.
Payday Loans Online
It is convenient, fast, easy and safe to apply for payday loans online if you have access to a computer and the Internet. Online lenders have application forms on their websites. Simply submit the short forms, and within a few hours or minutes, you will receive loan proposals and approvals. Online lenders have various interest rates and loan terms, and you should study the lenders’ contracts to verify that you agree with all the provisions they contain. If you approve and agree to the terms, you will quickly receive the loan funds via direct deposit to your checking account.
Faxless Payday Loans
Lending companies that provide cash advances online offer faxless payday loans that do not require credit checks or document faxing. Lenders can verify your employment and the existence of your bank account by making a few phone calls instead of by asking you to fax pay stubs and bank statements.
Requirements for Pay Day Loans
You must be over the age of 18, be a US citizen, earn at least $1,000 per month and have an open checking account to qualify for payday loans. Lenders deposit proceeds of pay day loans directly to your checking account and automatically withdraw your loan payments from your account on the due dates as well. The due dates of payday loans online are normally on your following paydays after receiving the cash advance loan funds. You must be certain to have the required amount in your account on those dates to avoid additional charges from the lending company as well as from your bank. In addition, late payments can have a harmful effect on your credit score.