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 Posted: Sun Jan 28, 2007 8:57 am Subject: illinois installment loan law |
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Well I've been trying to figure out the difference between a installment loan & a payday loan...from what I'm finding i'm pretty scared....looks like in Illinois this is how the pdl's get around the pdl laws ...let me know what you guys make of this...
| Quote: | II. Illinois Law
Although “payday loans” are exempt from Illinois’ criminal usury laws, “payday loan” lenders must abide by the regulations of another Illinois’ law, the Consumer Installment Loan Act.7 This act requires all businesses that make loans for under $25,000 to obtain a license from the Illinois Department of Financial Institutions, if the business is charging an interest rate that is higher than what would normally be allowed if the business did not have such a license.8 The Consumer Installment Loan Act essentially can be applied to all small loan lenders who wish to make loans at a rate greater than the state’s usury rate (currently 25%).9
Lenders who do receive a license under this Act are allowed to charge any interest rate on the short term loan, so long as the borrower agrees to such a rate.10 In exchange for the ability to charge a higher interest rate, the lender must agree to disclose the interest rate to the buyer as an annual percentage rate (apr), and the loan must be repaid within 15 years and 1 month.11 The lender is also not allowed to loan the borrower more than $40,000 of these short-term loans at any one time.12
The Illinois Department of Financial Institutions Regulations is authorized under the Consumer Installment Loan Act to make further rules and regulations concerning short-term loans, such as “payday loans.”13 The current regulations from the department limit the amount that may be borrowed in each loan, and the number of times a consumer is able to “rollover” or refinance a short-term “payday loan.”14 Currently, the regulations provide that a short-term loan that is not title-secured cannot exceed $400 per loan; short-term loans that are secured through a title can be made up to $2,000.15 A borrower may also refinance these short-term payday loans up to two times, provided that the borrower pays at least 20% of the loan’s outstanding balance.16 When the borrower is entering into a new loan contract (not just refinancing or “rolling over” current debt), the borrower must wait at least 15 days after the end of the existing loan contract before he or she enters into the new loan.17 Because of the dangers these high interest rate loans may pose for consumers, the regulations also require lenders to provide borrowers with pamphlets that describe the borrower’s rights and responsibilities, and the availability of debt management services. 18
Claims of violations under the Consumer Installment Loan Act may be brought as a private civil action19 or by Illinois’ Director of the Department of Financial Institutions.20 |
http://www.dcba.org/brief/julissue/2005/northern0705.htm
...from reading this Americash nor All Credit Lenders do not have titles securing my loans, and the loans were for $1500.00 according to this law states no more than $400.00 should have been borrowed to me...also the Americash did not make me wait 15 days to rollover ...they rolled it over the same day.
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candiceann2003
Joined: 13 Jan 2007
Posts: 90
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| Posted: Sun Jan 28, 2007 9:20 am Subject: |
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I have said this before in other posts. The definition of a "Payday Loan" per the Payday Loan Reform Act (PDLRA) is any loan: 1) at a rate over 36%, that 2) is for a term of 120 days or less, and 3) uses a post-dated check, electronic withdrawal, or wage assignment as security for the loan.
I've seen these places doing "installment loans" that are for 150 days, just so they don't fit the legal definition of a payday loan.
When the PDLRA went into effect on 12/1/06, the state was cracking down on these places for doing their 150-day loans, and the state called it "subterfuge for the purpose of avoiding the new laws." The state started fining places like Americash who were using the Consumer Installment Loan Act as their basis, when the state believed they should follow the PDLRA laws.
After the state cracked down last January - April 2006, all these payday stores got their lobby together down in Springfield and sued the state Department of Financial Institutions. Their basis was that the state was not interpretting the new laws exactly as they were written. A judge in Springfield sided with the payday stores, ruled in their favor, and succesfully ended the state's crack-down on "installment loans" for the time being.
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DebtCruncher
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| Posted: Mon Jan 29, 2007 2:43 am Subject: illinois |
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Okay well then I guess the only thing I have to fight these people on is the fact since they did not hold any titles of mine and the loans were more than $400 they were breaking the law, and Americash did not wait the 15 days to Rollover. Is this enough to fight them? Or am I breaking the law, I just can't pay them right now.
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candiceann2003
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| Posted: Fri Sep 26, 2008 6:13 am Subject: New installment loan |
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Is their a grace period to cancel an installment loan if you feel it was misrepresented
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Donna Loper
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PinkLady
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| Posted: Fri Sep 26, 2008 5:01 pm Subject: |
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Legally, once you sign the contract and receive loan proceeds, it becomes binding. There is no law in IL that gives you a right to cancel an installment loan.
How do you feel it was misrepresented? All lenders must comply with the Truth-in-Lending Act. If they didn't give you fair disclosure of the apr or finance charge, then they broke the law and yes, you could optionally void that loan. If, however, they did comply with TILA, then you'll have a hard time proving any misrepresentation.
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DebtCruncher
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| Posted: Sun Oct 26, 2008 5:21 pm Subject: INSTALLMENT LOAN |
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IN ILLINOIS, CAN THE LENDERS TAKE YOU TO COURT FOR DEFAULTING ON AN INSTALLMENT LOAN?
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TERRY PARISH
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| Posted: Sun Oct 26, 2008 5:51 pm Subject: |
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If they are licensed, than yes.
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DebtCruncher
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