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Beyond Payday Loans: Consumer Installment Lending in Illinois


In Illinois, discussions around establishing additional consumer protections for small-dollar, short-term credit often stall at the point of defining the substantive differences between the very short-term high-cost loans with a small number of payments, known as payday loans, and the longer-term but often equally expensive (in terms of finance charges) products, known as installment loans, that both fall under CILA. Past research has shown that some lenders in Illinois that previously offered very short-term, high cost loans have modified their products substantially, and in effect, avoided many of the consumer protections required by state law.

Because the public nature of the debate has largely focused on payday loans, little research attention has been directed to installment loans. As such, much of the information about installment lending under CILA is anecdotal. By collecting detailed, loan level data on non-payday lenders that currently operate under the Consumer Installment Loan Act, this report will provide a clear picture of the terms and conditions, borrower demographics, and default characteristics of installment loans than is currently
available to policymakers, regulators, or the public.