Illinois Governor Signs off on Law That Caps Online Payday Loan Rates at 36%

Payday loans online have become a saving grace for many people across the United States. Even though they come along with high extra charges, they are still popular among financially-challenged Americans. Online funders like USACashExpress offer a wide range of payday loans under different conditions. But they all stick to the state legislation.

While some states have drastic interest rates imposed on borrowers, others try to make things easier for average Americans. In Illinois, Governor J.B. Pritzker on Tuesday announced an intention to cap rates at 36% on different types of consumer borrowings. These include not only payday loans but also car title loans.

The new bill took the name of the Predatory Loan Prevention Act that was approved and signed by the Illinois General Assembly. The new legislation has been transformed into the Military Lending Act, a federal law that keeps active funding services under control. The major spheres of control include capping interest rates at 36%.

The major function to be fulfilled with the Predatory Loan Prevention Act is to stop any entity from making usurious loans to the citizens of Illinois. The reform provides thorough protective measures to the low-income social categories. Now, Illinois imposes a 36% rate coverage on guaranteed payday loan direct lender.

Before the official integration of legislative norms, the average annual percentage rate (APR) for payday loans has reached 297%. Illinois residents are charged almost $500 million for borrowing money from private funders.

Illinois joins the strong tendency across the nation toward stopping predatory loans. Nevertheless, some funding companies are already concerned about the broad specificity of the bill and its potential to restrict access to small-value borrowing within the state. They think that APRs are misleading because the average charges for a traditional two-week

payday loan online turned out to be pretty high - $15 for each $100 taken out by a borrower.

The Online Lenders Alliance expressed its disappointment with Governor Pritzker’s decision to introduce the bill. In fact, they called it a bad one due to the limitations it means for private funding companies. Now that consumers in Illinois are struggling financially, they will get fewer options at their disposal. Logically, some funders will decide to reduce the number of funding services and decide to offer them under less attractive conditions.

Some reliable funders like aren’t too aggressive toward the new initiative. They understand the government’s intentions to support the local residents. Instead of critical suggestions, they start thinking how to adjust their payday loan online services to new realities.

Yet the high interest rates and short revenues can make payday funds difficult to cover. According to the research study conducted by the Consumer Financial Protection Bureau, almost 1 in 4 borrowings is reborrowed several times, at least. In addition, it takes people about five months to pay everything back. Sometimes it gets even more complicated to deal with the debt.

More than 200 million US citizens reside in the areas that still support payday funding services without any restrictions. And these borrowings are easy to obtain within one day. You don’t even need to visit a land-based office. Just fill in the online form on the funder’s website, provide the requested documents, and wait for the final approval. If all is fine, you will see money on your balance very soon.