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Illinois Interest Rates Laws

Regardless of statutory limits on interest rates, consumers regularly agree to waive those limits and pay higher rates by clicking "I agree" online or signing a printed contract. Still, most states have so-called "usury" laws on the books, intended to prevent exorbitant rates. Illinois interest rate laws generally defer to contract law. One exception is a 9 percent limit on judgments, or 6 percent if the debtor is a local government, school district, or community college.

The basics of Illinois interest rate laws and applicable codes are listed in the following table. See Usury Laws and Limits on Credit Card Interest Rates to learn more.

Legal Maximum Rate of Interest Determined by the laws applicable at the time the contract is made (815 ILCS 205/4)
Penalty for Usury (Unlawful Interest Rate) Recipient subject to suit for twice total of all interest, charges, and attorney's fees and court costs (815 ILCS 205/6)
Interest Rates on Judgments 9% or 6% when judgment debtor is unit of local government, school district, or community college (735 ILCS 5/2-1303; 735 ILCS 5/12-109)
Exceptions Under Consumer Installment Loan Act (205 ILCS 670/1); short-term loans (815 ILCS 205/4.1a); installment loans (815 ILCS 205/4a; 205 ILCS 670/15); pawnbrokers (§205 ILCS 510/2); farm development loan (20 ILCS 3605/5 to 3605/12); reverse mortgage loan (205 ILCS 305/46)

Note: State laws are constantly changing -- contact an Illinois consumer protection attorney or conduct your own legal research to verify the state law(s) you are researching.

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