Illinois Payday Loans vs Installment Loans - Which Is Better? (2026)
Illinois offers two main types of short-term loans: payday loans (13-120 days, lump sum repayment, 300-400% APR) and installment loans (6-60 months, monthly payments, 36-199% APR). Both are regulated by the Illinois Department of Financial and Professional Regulation (IDFPR), but they serve different needs. This guide compares payday vs installment loans in Illinois, explains the $1,000 payday cap and 25% income limit, and helps you choose the right loan type for your situation.
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Payday Loans vs Installment Loans in Illinois - Key Differences
Illinois allows both payday loans and installment loans, but they are fundamentally different products with different regulations, costs, and use cases. Understanding these differences is critical to making the right borrowing decision.
| Feature | Illinois Payday Loans | Illinois Installment Loans |
|---|---|---|
| Maximum Amount | $1,000 or 25% of gross monthly income (whichever is less) | $2,500-$10,000 (varies by lender) |
| Loan Term | 13-120 days (typically 14-30 days) | 6-60 months (typically 12-36 months) |
| Repayment Structure | Single lump sum (pay entire amount + fee on due date) | Monthly payments (equal installments over term) |
| APR Range | 300-404% APR | 36-199% APR |
| Fee Structure | $15.50 per $100 for first $500, lower for amounts over $500 | Interest + origination fee (1-8% of loan) |
| Credit Check | No traditional credit check (database check only) | Soft or hard credit check (may accept bad credit) |
| Credit Reporting | Not reported to credit bureaus (unless collections) | Reported to credit bureaus (helps build credit) |
| Funding Speed | Same-day (in-store) or next-day (online) | 1-3 business days |
| Multiple Loans | Up to 2 loans, $1,000 total max | Typically 1-2 loans depending on lender |
| Regulation | Payday Loan Reform Act (815 ILCS 122) | Consumer Installment Loan Act (205 ILCS 670) |
| Best For | Small emergencies under $500, need cash today, can repay in 2-4 weeks | Larger expenses $1k+, need 6-24 months to repay, want to build credit |
When to Choose Each Loan Type:
Choose Payday Loan If:
- You need less than $500
- You can repay in 2-4 weeks
- You need cash same-day/next-day
- You have bad credit or no credit
Choose Installment Loan If:
- You need $1,000 or more
- You need 6+ months to repay
- You want to build credit
- You prefer monthly payments over lump sum
Illinois Payday Loan Regulations ($1,000 Max, 25% Income Limit)
Illinois regulates payday loans under the Payday Loan Reform Act (815 ILCS 122), enacted in 2011 to prevent debt traps. The law caps fees, limits borrowing amounts, and enforces a statewide database to track all payday loans.
Illinois Payday Loan Rules:
- $1,000 or 25% of gross monthly income - Whichever is less (e.g., if you earn $3,000/month, max is $750)
- $15.50 per $100 fee cap - For first $500; lower rates for amounts over $500
- 13-120 day loan terms - Minimum 13 days prevents same-day rollovers
- 2 loans maximum - Can have 2 payday loans at once, but total cannot exceed $1,000 or 25% income
- 45-day limit in 90 days - Cannot have more than 45 days of payday debt in any 90-day period
- Database tracking - All loans tracked in Illinois Payday Loan Database (managed by Veritec)
- Free repayment plan - After 35 days of debt or 3 consecutive loans, lenders must offer 55-day free plan
Illinois Payday Loan Cost Examples:
| Loan Amount | Loan Term | Fee (15.5%) | Total Repayment | APR |
|---|---|---|---|---|
| $300 | 14 days | $46.50 (15.5%) | $346.50 | 404% APR |
| $500 | 14 days | $77.50 (15.5%) | $577.50 | 404% APR |
| $1,000 (max) | 30 days | $155 (15.5%) | $1,155 | 186% APR |
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Illinois Installment Loans - Lower APR, Monthly Payments
Installment loans in Illinois are regulated under the Consumer Installment Loan Act (205 ILCS 670). Lenders making over $40,000 in annual consumer installment loans must be licensed by the IDFPR. These loans offer longer terms, lower APRs, and monthly payments compared to payday loans.
Illinois Installment Loan Features:
- Higher loan amounts - $1,000-$10,000 (some lenders offer up to $35,000)
- Lower APRs - 36-199% APR (vs 300-400% for payday loans)
- Monthly payments - Fixed equal payments over 6-60 months
- Credit building - Most lenders report to Equifax, Experian, TransUnion
- Bad credit accepted - Many lenders accept credit scores 500-600+
- No prepayment penalties - Pay off early to save on interest (most lenders)
Illinois Installment Loan Cost Examples:
| Loan Amount | Loan Term | APR | Monthly Payment | Total Cost |
|---|---|---|---|---|
| $1,000 | 6 months | 60% APR | $183 | $1,100 (total interest: $100) |
| $2,500 | 12 months | 99% APR | $267 | $3,200 (total interest: $700) |
| $5,000 | 24 months | 120% APR | $294 | $7,060 (total interest: $2,060) |
| $10,000 | 36 months | 155% APR | $483 | $17,400 (total interest: $7,400) |
Payday vs Installment - Which Costs Less in Illinois?
Let's compare the same $1,000 loan amount under both loan types to see which is cheaper:
| Feature | Payday Loan ($1,000) | Installment Loan ($1,000) | Winner |
|---|---|---|---|
| Loan Term | 30 days | 12 months | Installment (more time) |
| APR | 186% APR | 60% APR | Installment (lower APR) |
| Total Fee/Interest | $155 fee | $200-300 interest | Payday (lower total $) |
| Total Repayment | $1,155 (in 1 payment) | $1,200-1,300 (12 payments) | Payday (lower total) |
| Payment Structure | $1,155 lump sum (30 days) | $100-108/month for 12 months | Installment (easier to manage) |
| Credit Building | No credit reporting | Reports to credit bureaus | Installment (builds credit) |
| Best For | Can repay $1,155 lump sum in 30 days | Need 12 months of $100/month payments | Depends on your budget |
π‘ Key Insight: APR vs Total Cost
Payday loans have higher APR (186% vs 60%) but lower total cost ($155 vs $200-300) because the loan term is much shorter (30 days vs 12 months). However, the lump sum payment ($1,155 in one payment) is much harder to afford than monthly payments ($100-108 per month).
Rule of thumb: If you can afford the lump sum repayment in 2-4 weeks, payday loans cost less in total dollars. If you need 6+ months to repay, installment loans are better despite higher total cost because they have lower monthly payments and lower APR.
Top 10 Lenders in Illinois - Payday & Installment (2026)
The following lenders are licensed by the Illinois IDFPR and offer either payday loans, installment loans, or both. Verify license status at idfpr.illinois.gov before applying.
1. Check Into Cash
Licensed in Illinois | 60+ Locations | Payday & Installment
Check Into Cash operates 60+ stores across Illinois in Chicago, Aurora, Naperville, Joliet, Rockford, and Springfield. They offer both payday loans (up to $1,000 for 14-30 days) and installment loans (up to $5,000 for 6-24 months). Typical payday fee is 15.5%. Installment APR is 99-199%.
2. CashNetUSA
Licensed in Illinois | Online Only | Payday & Installment
CashNetUSA is one of Illinois's largest online lenders, licensed since 2011. They offer payday loans (up to $1,000 for 13-30 days, 15.5% fee) and installment loans (up to $3,500 for 6-24 months, 99-150% APR). Online application takes 3 minutes with next-day funding.
3. ACE Cash Express
Licensed in Illinois | 40+ Locations | Payday & Installment
ACE Cash Express has 40+ stores in Illinois, including Chicago, Aurora, Rockford, and Peoria. They offer payday loans (up to $1,000 for 14-30 days) and installment loans (up to $4,000 for 6-18 months). Many locations open until 9pm on weekdays. Also offer check cashing and bill pay.
4. Advance America
Licensed in Illinois | 25+ Locations | Payday Only
Advance America operates 25+ stores in Illinois, including Chicago suburbs, Rockford, Peoria, and Decatur. They specialize in payday loans (up to $1,000 for 13-30 days) with 15.5% fees. First-time customers may qualify for lower fees (12-14%). Online applications available for returning customers.
5. Speedy Cash
Licensed in Illinois | 30+ Locations | Payday & Installment
Speedy Cash has 30+ locations in Illinois, including Chicago, Aurora, Joliet, and Rockford. They offer payday loans (up to $1,000 for 14-30 days, 15.5% fee) and installment loans (up to $3,000 for 6-18 months, 120-180% APR). Mobile app available for account management and renewals.
6. MoneyLion
Licensed in Illinois | App-Based | Installment ($0-$20 fees)
MoneyLion offers cash advances up to $500 to Illinois residents through their mobile app. Unlike traditional payday loans, MoneyLion charges $0-$19.99 monthly membership fees instead of high APR loans. Instant transfers available for $3.99-$8.99 fee. Credit-building tools included.
7. Possible Finance
Licensed in Illinois | App-Based | Installment (4 Payments)
Possible Finance offers short-term installment loans (not traditional payday loans) up to $500 to Illinois residents. Loans are repaid in 4 bi-weekly installments aligned with your payday. APR is 150-200% (lower than payday loans). Reports to credit bureaus to help build credit.
8. NetCredit
Licensed in Illinois | Online Only | Installment Loans
NetCredit offers installment loans (not payday loans) up to $10,000 to Illinois residents with bad credit. APR is 34-155% with monthly payments over 6-60 months. Better alternative to payday loans if you need more time to repay. Soft credit check for prequalification, reports to credit bureaus.
9. RISE Credit
Licensed in Illinois | Online Only | Installment + APR Reduction
RISE offers installment loans up to $5,000 to Illinois residents with bad credit. Initial APR is 60-299%, but RISE reduces your APR over time as you make on-time payments (APR Reduction Program). Loans are 4-26 months with bi-weekly or monthly payments. Reports to all 3 credit bureaus.
10. OppFi (formerly OppLoans)
Licensed in Illinois | Online Only | Bad Credit Installment
OppFi offers installment loans up to $4,000 to Illinois residents with bad credit (no minimum credit score). APR is 59-199% with monthly payments over 6-24 months. Better than payday loans for larger amounts and longer repayment terms. No prepayment penalties, reports to credit bureaus.
Frequently Asked Questions - Illinois Payday vs Installment
What is the difference between payday loans and installment loans in Illinois?
In Illinois, payday loans are short-term loans (13-120 days) repaid in a single lump sum with APRs of 300-400%. Maximum loan amount is $1,000 or 25% of gross monthly income (whichever is less). Installment loans are longer-term loans (6-60 months) repaid in monthly payments with APRs of 36-199%. Maximum amount is typically $2,500-$10,000 depending on lender. Payday loans are better for small emergencies under $500 that you can repay in 2-4 weeks. Installment loans are better for larger expenses ($1,000+) where you need 6-24 months to repay.
How much does a payday loan cost in Illinois?
Illinois caps payday loan fees at $15.50 per $100 borrowed for loans up to $500. For amounts over $500, fees are capped at $15.50 per $100 for the first $500, then lower rates apply. A typical $500 payday loan for 14 days costs $77.50 in fees (15.5%), making total repayment $577.50. This equals 404% APR. For comparison, a $500 installment loan for 6 months costs $80-120 in total interest (36-60% APR), but you pay monthly instead of one lump sum.
Can I have multiple payday loans in Illinois?
Yes, Illinois allows you to have up to 2 payday loans at once, but the total combined amount cannot exceed $1,000 or 25% of your gross monthly income (whichever is less). This is enforced through the Illinois Payday Loan Database, which all licensed lenders must check before approving loans. For example, if you have a $600 payday loan, you can only borrow an additional $400 until you repay the first loan. You cannot have more than 45 days of payday loans outstanding in a 90-day period.
What is better for bad credit in Illinois - payday or installment?
For bad credit borrowers in Illinois, installment loans are usually better because they: 1) Report to credit bureaus, helping rebuild credit with on-time payments, 2) Have lower APRs (36-199% vs 300-400% for payday loans), 3) Offer monthly payments instead of lump sum repayment, 4) Provide longer repayment terms (6-60 months vs 13-120 days). However, payday loans are easier to qualify for (no credit check) and provide same-day funding. Choose payday loans only for emergencies under $500 that you can repay within 2-4 weeks. For larger amounts or longer repayment needs, choose installment loans.
Does Illinois regulate payday and installment lenders?
Yes, both payday and installment lenders in Illinois are regulated by the Illinois Department of Financial and Professional Regulation (IDFPR). Payday lenders operate under the Payday Loan Reform Act (815 ILCS 122), which caps fees at $15.50 per $100, limits loans to $1,000 or 25% of income, and enforces a statewide database to track borrowing. Installment lenders over $40,000 in annual business must be licensed under the Consumer Installment Loan Act. The IDFPR investigates complaints and can revoke licenses. Verify license status at idfpr.illinois.gov before borrowing.
How long do I have to repay a payday loan in Illinois?
Illinois payday loans have terms ranging from 13 to 120 days. Most lenders offer 14-day or 30-day terms aligned with your payday. Illinois law prohibits loans shorter than 13 days to prevent same-day debt traps. If you cannot repay on time, Illinois requires lenders to offer a free repayment plan after 35 days of indebtedness or if you have taken 3 consecutive loans. The plan allows 55 days to repay with no additional fees. In comparison, installment loans in Illinois typically have 6-60 month terms with monthly payments.
Which loan type is cheaper in Illinois - payday or installment?
For the same loan amount, installment loans are almost always cheaper than payday loans in Illinois. Example: $1,000 loan - Payday loan (30 days): $155 fee = $1,155 total (186% APR). Installment loan (12 months): $200-400 total interest (36-60% APR) = $1,200-1,400 total. While the installment loan has higher total cost, the APR is much lower and you have 12 monthly payments of $100-117 instead of one $1,155 lump sum. For smaller amounts under $500 that you can repay in 2 weeks, payday loans may cost less in total dollars but have much higher APR.
How do I choose between payday and installment loans in Illinois?
Choose a payday loan in Illinois if: You need under $500, can repay within 2-4 weeks, need same-day funding, have bad credit or no credit. Choose an installment loan if: You need $1,000+, need 6+ months to repay, want to build credit, want lower APR (36-199% vs 300-400%), prefer monthly payments over lump sum. Key factors: Payday loans are faster (same-day) but more expensive (400% APR). Installment loans are slower (1-3 days) but cheaper (36-199% APR) and better for credit building. Never take a payday loan if you cannot afford the full lump sum repayment on your next payday.
Related Resources
Payday Loans in Illinois
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View Illinois State Page βPayday Loans Chicago
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View Chicago Page βPayday Loans Aurora
Compare payday loan options in Aurora, Illinois.
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Get Started (IDFPR Licensed)Disclaimer: This article is for informational purposes only and does not constitute financial advice. Illinois payday and installment loan regulations are current as of January 2026. All lenders mentioned are licensed by the Illinois Department of Financial and Professional Regulation (IDFPR). Verify license status at idfpr.illinois.gov before applying.
Responsible Lending: Payday loans are expensive (300-404% APR) and should only be used for short-term emergencies. Borrow only what you can afford to repay on your next payday. Consider installment loans (36-199% APR) for larger amounts or longer repayment needs, as they help build credit and have lower APRs.
Author: Rostislav Sikora is an AI Orchestrator and Loan Specialist with expertise in consumer finance regulations and payday lending compliance.