Munoz protects consumers from large final payments on payday loans

SPRINGFIELD – To protect individuals who take out a payday loan, Assistant Majority Leader Tony Munoz (D-Chicago) is leading efforts to ensure that the final payment on a loan is not significantly higher than the previous payment.

“Consumers shouldn’t be overwhelmed by the final payment on a loan,” Munoz said. “They should be able to budget throughout the life of a loan without any surprises.”

Senate Bill 1758, which was approved by the Senate executive Committee on Wednesday, caps the amount for a final payment on a loan to 5 percent more than the previously scheduled payment.

The plan clarifies the meaning of “substantially equal installments” in a previous law enacted to help consumers budget effectively to pay back loans. It also makes sure that the entire principal on a loan is not due on the last payment.

The measure heads to the full Senate for consideration.