illinois

Conventional wisdom says that when a payday loan or cash advance company arrives in Chicago, there isn't much going on economically. What there is plenty of, though, is desperation, and as families struggle to pay bills, the payday loan industry's quick cash advance solution starts looking pretty good. And that's sad, because many who vow to get a loan as an emergency step to buy groceries or pay a bill get trapped in an endless cycle of payday loans and soaring interest charges.
Illinois' year-old law won't eliminate bottom-feeding businesses from Freeport or anywhere else completely. But its puts limits on interest charges and the number of loans an individual can have at the same time.

Pay Day Cash Loans

Over the last ten years, short term unsecured loans, often called "payday loans" because they are repaid on pay day, have become a much larger industry, with more than 1000 payday loan outlets throughout the United States. Consumers most often use pay day loans to avoid the high fees associated with bouncing cashed checks or pawnshops. Interest rates, however, can quickly reach an average annual percentage rate of over 300 percent, often trapping certain borrowers in a cycle of skyrocketing paycheck amounts.

Hoping to counter the influence of promotions for payday loans, the Consumer Federation of America launched a Web site earlier this month with details about the high-interest loans. For the consumer wondering whether to take out a payday loan, the advocacy group offers a calculator to determine the full cost. For the borrower who has a problem with a pay-day loan, there is information about filing a complaint.

The proposed change in the zoning ordinance also would apply to check-cashers, auto-title lenders and retailers of used merchandise. The change would exclude antique stores from the restrictions. Used-car dealers and pawnshops would not be affected.

Payday loans are short-term, high-interest cash advances made to individuals who have a checking account and a steady source of income. When making a loan, lenders take a post dated check for the loan amount plus the interest as collateral. If a borrower does not return with a cash payment when the loan is due, the lender cashes the check.