Study finds that capping payday loan interest rates worked, allowing more wealth to stay in communities as consumers find new sources of fast cash

Illinois consumers saved over $200 million in predatory loan fees in the five months after rates were capped at 36% in March of last year.

ILLINOIS–A statewide survey conducted by the Woodstock Institute and partners New America Chicago and Chicago Urban League found that consumers who previously relied on predatory loans–with average interest rates of up to 297%–have successfully used other avenues to gain access to capital following last year’s landmark legislation, the Predatory Loan Prevention Act, which caps consumer loans at an annual percentage rate (APR) of 36%.

Since that time, predatory lenders have closed en masse because their profit margins relied on trapping consumers in a cycle of debt. With such high interest rates, consumers would often be unable to pay without taking on even more debt. In just the five months after the rate cap went into effect in March 2021, Illinois consumers saved over $200 million in predatory loan fees.

Instead, as in other states with rate caps that saw similar closures of predatory lenders, Illinois consumers currently use a variety of available resources and strategies to address their financial needs. 75% of total respondents had tried to borrow cash or knew a family member or friend who had tried to borrow cash in the six months before taking the survey. Of those respondents, 86% were able to borrow some or all of what they needed. 

This high percentage shows, even with Illinois’ 36% rate cap, the vast majority of Illinois consumers are able to borrow money – whether through a traditional lender or some other means, such as friends or family.

“We have long known that Illinois consumers do not need loans that charge 297% APR,” said Brent Adams, Senior Vice President of Policy & Communication at the Woodstock Institute. “Now that the predatory lenders have left the State, consumers have a significantly better chance to build wealth and rebuild their communities.”

About the survey:

Survey respondents (n=107) consisted of folks who completed the survey at The survey was promoted through a variety of media: social, radio, newspaper ads, Craigslist ad, and outreach through policymakers and nonprofits.

79% of total survey respondents said they have needed extra cash for emergency or regular expenses since April 1, 2021. Within that group, 60% had previously used payday or auto title loans.


Woodstock Institute is a leading policy and research nonprofit that advocates for consumer financial protection and community economic development. Our work seeks to combat structural inequities and to improve the quality of life in lower-income neighborhoods and communities of color. Among our areas of focus are predatory lending, access to banking, debt collection, and municipal fines and fees.