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State rules

Illinois auto loan rules

Illinois has 1,294 Census places covered on AutoLoanable, with a combined estimated population of 10,940,788. Vehicle financing in Illinois is governed by state law — the interest-rate caps, title-lending rules, sales-finance licensing and the regulator that oversees them. The sourced figures below apply to every car loan made to a borrower in the state.

By the AutoLoanable Editorial Team · Last updated 2026-09-17

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9% cap state usury cap
6.25% statewide state vehicle sales tax
Permitted vehicle title loans
IDFPR state regulator

Key rules for car buyers in Illinois

RuleDetailSource
Maximum legal interest rate (usury cap) 9% annual percentage rate (general written-contract interest cap)
Source says: "it shall be lawful for the parties to stipulate or agree that an annual percentage rate of 9%, or any less sum".		 Illinois General Assembly (Illinois Compiled Statutes)
as of 2026-09-17
Vehicle title loan status Title-secured loans remain a licensed Consumer Installment Loan Act category but are subject to the Predatory Loan Prevention Act's 36% APR cap; loans exceeding the cap are null and void, effectively eliminating high-cost title loans.
Source says: "a lender shall not contract for or receive charges exceeding a 36% annual percentage rate on the unpaid balance of the amount financed for a loan" License category: Consumer Installment Loan Act (CILA) license (205 ILCS 670).		 Illinois General Assembly — 815 ILCS 123/15-5-5 (Predatory Loan Prevention Act)
as of 2026-09-17
Sales finance / installment lender licensing Consumer Installment Loan Act license required from the Director of Financial Institutions (loans above 9% APR)
Source says: "No person ... shall engage in the business of making loans of money ... except ... after first obtaining a license from the Director of Financial Institutions". Motor-vehicle retail installment sales are separately governed by the Motor Vehicle Retail Installment Sales Act (815 ILCS 375).		 Illinois General Assembly (Illinois Compiled Statutes)
as of 2026-09-17
State lending regulator Illinois Department of Financial and Professional Regulation (IDFPR), Division of Financial Institutions
Source says: "DFI licenses, charters, and examines a wide variety of financial products and services including: Consumer and Sales Finance and Collection Agencies".		 Illinois Department of Financial and Professional Regulation
as of 2026-09-17
Sales tax on vehicle purchases 6.25% state rate; local taxes additional (vehicle use tax rates vary by location).
Source says: "Use Tax rates are 6.25% of the purchase price of general merchandise"		 Illinois Department of Revenue
as of 2026-09-17

How to use these rules

  1. Check the ceiling before you compare offers

    If a quoted APR looks extreme, compare it against the Illinois cap above — and note that a specific statutory exemption can apply to a particular product.

  2. Verify the lender is licensed

    Use the regulator named in the table to confirm the lender or sales-finance company may legally serve borrowers in the state.

  3. Know what is secured against your car

    A vehicle title loan is secured by the car itself. If the state permits it, understand the repossession terms before you sign anything.

  4. Budget for tax and fees separately

    Sales tax and title fees are financed along with the car, so they raise the amount you borrow — and therefore the interest you pay on them.

Cities in Illinois

We cover 1,294 Census places in Illinois.

Frequently asked questions

What interest rate can a lender charge on a car loan in Illinois?
It depends on the product and the statute that governs it. The sourced table on this page lists Illinois's usury cap, its motor-vehicle sales-finance rules and the licensing requirements, each with its publisher and a link to the primary source.
Are title loans legal in Illinois?
Vehicle title lending is regulated state by state; some states permit it under a licensed lender, some cap it, and some prohibit it outright. See the sourced figure on this page for the current position, and confirm it with the state regulator before you sign anything.
Do I need a license to finance a car in Illinois?
Most consumer lenders and motor-vehicle sales-finance companies must be licensed by the state regulator named on this page. You can verify a lender's licence with that regulator before you sign anything.

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