Illinois Interest Rate Laws
Chapter 815 of the Illinois Compiled Statutes governs the rate of interest in the state of Illinois. Section 815 ILCS 205/1 prescribes the maximum rate of interest upon a loan or forbearance of money, goods, or things in action as $5 upon $100 for one year. Section 815 ILCS 205/4 prescribes a rate of interest of 9 percent per annum in all written contracts. Contracts providing for a higher rate of interest are void. Section 815 ILCS 205/5 prohibits any person from accepting or receiving any greater sum or value for the loan than which is permitted by the provisions of this Chapter.
Section 815 ILCS 205/6 provides that persons paying usurious or unlawful amount of interest can recover, from persons receiving such interest, an amount equal to twice the total of all interest, discount and charges plus reasonable attorney fees and court costs. Interest on judgment is prescribed by Section 735 ILCS 5/2-1303 at the rate of 9 percent per annum from the date of the judgment until satisfied. When the judgment debtor is a unit of local government, a school district, a community college district, or any other governmental entity, the rate will be 6 percent per annum. By virtue of Section 205 ILCS 670/15, a licensee and a borrower may agree upon a rate of interest for a principal amount not exceeding $ 40,000.
815 ILCS 205/1
[Rate of interest]
Sec. 1. The rate of interest upon the loan or forbearance of any money, goods or thing in action, shall be five dollars ($ 5) upon one hundred dollars ($ 100) for one year, and after that rate for a greater or less sum, or for a longer or shorter time, except as herein provided.
815 ILCS 205/2
[Creditors rate; after money due]
Sec. 2. Creditors shall be allowed to receive at the rate of five (5) per centum per annum for all moneys after they become due on any bond, bill, promissory note, or other instrument of writing; on money lent or advanced for the use of another; on money due on the settlement of account from the day of liquidating accounts between the parties and ascertaining the balance; on money received to the use of another and retained without the owner’s knowledge; and on money withheld by an unreasonable and vexatious delay of payment. In the absence of an agreement between the creditor and debtor governing interest charges, upon 30 days’ written notice to the debtor, an assignee or agent of the creditor may charge and collect interest as provided in this Section on behalf of a creditor.
815 ILCS 205/4
General interest rate
Sec. 4. General interest rate. (1) Except as otherwise provided in Section 4.05 [815 ILCS 205/4.05], in all written contracts it shall be lawful for the parties to stipulate or agree that 9% per annum, or any less sum of interest, shall be taken and paid upon every $ 100 of money loaned or in any manner due and owing from any person to any other person or corporation in this state, and after that rate for a greater or less sum, or for a longer or shorter time, except as herein provided.
The maximum rate of interest that may lawfully be contracted for is determined by the law applicable thereto at the time the contract is made. Any provision in any contract, whether made before or after July 1, 1969, which provides for or purports to authorize, contingent upon a change in the Illinois law after the contract is made, any rate of interest greater than the maximum lawful rate at the time the contract is made, is void.
815 ILCS 205/5
Sec. 5. No person or corporation shall directly or indirectly accept or receive, in money, goods, discounts or thing in action, or in any other way, any greater sum or greater value for the loan, forbearance or discount of any money, goods or thing in action, than is expressly authorized by this Act or other laws of this State.
815 ILCS 205/6.
[Receipt of unlawful interest, discount of charges; acts done in good faith]
Sec. 6. If any person or corporation knowingly contracts for or receives, directly or indirectly, by any device, subterfuge or other means, unlawful interest, discount or charges for or in connection with any loan of money, the obligor may, recover by means of an action or defense an amount equal to twice the total of all interest, discount and charges determined by the loan contract or paid by the obligor, whichever is greater, plus such reasonable attorney’s fees and court costs as may be assessed by a court against the lender. The payments due and to become due including all interest, discount and charges included therein under the terms of the loan contract, shall be reduced by the amount which the obligor is thus entitled to recover. Recovery by means of a defense may be had at any time after the loan is transacted. Recovery by means of an action may be had at any time after the loan is transacted and prior to the expiration of 2 years after the earlier of (1) the date of the last scheduled payment of the loan after giving effect to all renewals or extensions thereof, if any, or (2) the date on which the total amount due under the terms of the loan contract is fully paid. A bona fide error in connection with a loan shall not be a violation under this section if the lender corrects the error within a reasonable time.
735 ILCS 5/2-1303
Interest on judgment
Sec. 2-1303. Interest on judgment. Judgments recovered in any court shall draw interest at the rate of 9% per annum from the date of the judgment until satisfied or 6% per annum when the judgment debtor is a unit of local government, as defined in Section 1 of Article VII of the Constitution, a school district, a community college district, or any other governmental entity. When judgment is entered upon any award, report or verdict, interest shall be computed at the above rate, from the time when made or rendered to the time of entering judgment upon the same, and included in the judgment. Interest shall be computed and charged only on the unsatisfied portion of the judgment as it exists from time to time. The judgment debtor may by tender of payment of judgment, costs and interest accrued to the date of tender, stop the further accrual of interest on such judgment notwithstanding the prosecution of an appeal, or other steps to reverse, vacate or modify the judgment.
735 ILCS 5/12-109
Interest on judgments
Sec. 12-109. Interest on judgments. (a) Every judgment except those arising by operation of law from child support orders shall bear interest thereon as provided in Section 2-1303 [735 ILCS 5/2-1303].
205 ILCS 670/1
License required to engage in business
Sec. 1. License required to engage in business. No person, partnership, association, limited liability company, or corporation shall engage in the business of making loans of money in a principal amount not exceeding $ 25,000, and charge, contract for, or receive on any such loan a greater rate of interest, discount, or consideration therefor than the lender would be permitted by law to charge if he were not a licensee hereunder, except as authorized by this Act after first obtaining a license from the Director of Financial Institutions (hereinafter called the Director).
205 ILCS 670/15
Sec. 15. Charges permitted. (a) Every licensee may lend a principal amount not exceeding $ 40,000 and may charge, contract for and receive thereon interest at the rate agreed upon by the licensee and the borrower, subject to the provisions of this Act.
205 ILCS 305/46
Loans and interest rate
Sec. 46. Loans and interest rate. (1) A credit union may make loans to its members for such purpose and upon such security and terms, including rates of interest, as the Credit Committee, credit manager, or loan officer approves. Notwithstanding the provisions of any other law in connection with extensions of credit, a credit union may elect to contract for and receive interest and fees and other charges for extensions of credit subject only to the provisions of this Act and rules promulgated under this Act, except that extensions of credit secured by residential real estate shall be subject to the laws applicable thereto. The rates of interest to be charged on loans to members shall be set by the Board of Directors of each individual credit union in accordance with Section 30 of this Act [205 ILCS 305/30] and such rates may be less than, but may not exceed, the maximum rate set forth in this Section. A borrower may repay his loan prior to maturity, in whole or in part, without penalty. The credit contract may provide for the payment by the member and receipt by the credit union of all costs and disbursements, including reasonable attorney’s fees and collection agency charges, incurred by the credit union to collect or enforce the debt in the event of a delinquency by the member, or in the event of a breach of any obligation of the member under the credit contract. A contingency or hourly arrangement established under an agreement entered into by a credit union with an attorney or collection agency to collect a loan of a member in default shall be presumed prima facie reasonable.
205 ILCS 510/2
Sec. 2. It shall be unlawful for any pawnbroker to charge or collect a greater benefit or percentage upon money advanced, and for the use and forbearance thereof, than the rate of 3% per month. Nothing in this Section shall be construed so as to conflict with the law pertaining to usury and the person receiving money so advanced may hold such moneys to pay any fees in addition to interest as herein provided.
Each pawnbroker may contract for and receive a monthly finance charge including interest and fees not to exceed one-fifth of the loan amount, as set forth herein, for appraising, investigating title, storing and insuring the collateral, closing the loan, making daily reports to local law enforcement officers including enhanced computerized reporting, complying with regulatory requirements, and for other expenses and losses of every nature whatsoever and for all other services. Such fees, when made and collected, shall not be deemed interest for any purpose of law.