Illinois Usury Laws
Illinois has one of the more restrictive laws governing lending practices and usury limitations to be found anywhere in the U.S.A. today. Presently, the general usury limitations in Illinois is set at 9%. Moreover, the interest rate established for civil judgments is also set at 9%
The rules governing usury and usurious interest rates in Illinois are codified at Illinois Compiled Statutes at Chapter 800. Indeed, the rules governing most types of permissible and prohibited lending practices -- including usury regulation -- generally is codified in this section of Illinois state statutes.
On a related note, courts in Illinois have been known to take two different approaches when it comes to dealing with loan agreements that contain impermissible interest rates. If the violation of the statutes governing interest rates in Illinois is not to egregious, in some instances the courts will simply reformat the underlying agreement and insert an appropriate interest rate into the agreement. At the other extreme, if the interest rate regulation violation is more significant, a court may strike down the entire loan agreement as being void, unenforceable and illegal.
In some more extreme instances, Illinois statutes do allow for the criminal prosecution of individuals who have seriously and repeatedly violated statutes in Illinois governing usury and lending practices. In such instances, an individual found guilty of such a violation of the law can face a felony conviction and prison time.
The statutory scheme in Illinois governing certain personal loan lending practices and companion interest rates is somewhat supplemented by the provisions in U.S. statutes governing unlawful debt and illegal interest rates in some instances. However, the federal proscriptions governing usury comes only into play in those limited instances in which a debt is attempted to be collected that carries with it an interest rate that is twice what is legally permissible according to state statute. In such circumstances, the attempt to collect such a debt with usurious interest is deemed to be a violation of federal RICO statutes. Such a violation is a felony. On the street, this type of lending and interest rate practice is considered to be loan sharking.
Keep in mind that nothing contained in this article should be construed as giving to you legal advice. If you have any questions or concerns about usury laws or lending practices in Illinois, you need to contact a lawyer with experience in this area. Also, we make every attempt to keep the information in this article accurate. The laws pertaining to usurious lending practices do change from time to time. Therefore, we cannot always guarantee the complete accuracy of the information contained in this informational article.