What is the Illinois Consumer Installment Loan Act?
May 22, 2019
With so many options available when looking to apply for an installment loan from online lenders, it’s hard to know where to go. With differing annual percentage rates, interest, and overall terms, one important aspect you should always take into consideration is looking at lenders that are trusted and licensed.
So, what do licensed lenders follow in terms of rules and regulations and why should you consider lenders that are licensed versus those that aren’t? With the Illinois Consumer Loan Act, licensed lending businesses must adhere its loan requirements. Unsure what this means for you? Illinois Lending is here to explain what the act is, which types of loans are included in the Act, and why you should borrow from lenders that are registered under it.
What is the Illinois Consumer Installment Loan Act?
The Illinois Consumer Installment Loan Act (ICILA) is an act that took effect in September of 1963. In short, the act authorizes lending businesses that are licensed and regulated to provide installment loans to borrowers. These loans are typically short-term, with a max loan term of 181 months. Also, the loan must be under the maximum lending amount of $40,000.
What types of loans fall under the Illinois Consumer Installment Loan Act?
There are a variety of loan types that are including within the ICILA. Two main categories of loans are:
- Car loans: When one borrows money to solely purchase or repair a car. You can typically borrow up to $40,000. In some instances, the car you purchase may be used as collateral in case you cannot repay the loan.
- Personal loans: When one takes out a loan that is needed for personal use. This can include weddings, medical expenses, consolidating debt, and more. You can borrow up to $25,000. There is typically no form of security required.
Why should you take out installment loans with lenders that are licensed under the ICILA?
As we mentioned earlier, not all lenders are licensed under the Illinois Consumer Installment Loan Act. Borrowers may decide to receive money from lenders that are not regulated by this act. Why would people want to do this? The main reason being that may be a cheaper option. Some lenders under the Act may charge higher amounts than those that are not.
Although there are instances where a non-regulated loan is less expensive, there are more benefits to choosing an ICILA-approved business than cons. First, you know the loan you’re receiving is legal. Loan sharks, typically lenders that offer loans with extremely high-interest rates, usually operate outside of these regulations. While receiving the loan may be easy, if issues arise, you cannot turn to state regulators for help. Secondly, with ICILA lenders, the cost of the entire loan is transparent. You’ll know exactly how much the loan will cost you right away, versus receiving the loan only to find out that the APR or interest rates are much higher than previously assumed.
Looking for an installment loan provided by an ICILA-approved lender?
Look no further. With Illinois Lending, we are proud to be licensed by the Illinois Consumer Installment Loan Act. You can easily apply for and receive personal loans without a credit check. Apply online through our secure portal or submit all necessary documents in person and receive your check the same day.