topic SOFI Personal Loan Not Available Due to IL Law? in Personal Finance

SOFI Personal Loan Not Available Due to IL Law?

John02 — Sun, 08 Jan 2017 02:44:32 GMT

Hi,

I recently tried to apply for a SOFI personal loan and it initially said pre-approved. However when I clicked continue it said sorry we can't approve you. I called in to see what was going on and they said there is a relatively recent (early 2016) IL law against consumer loans over a certain percentage (think it was around 8.99 or 9.99). Has anyone ever heard of this before? I searched around some and couldn't find anything.

Thanks for any info!

John

Re: SOFI Personal Loan Not Available Due to IL Law?

heavyjay — Sun, 08 Jan 2017 19:13:11 GMT

According to this website it's been like that since at least 2012.

http://www.lendingkarma.com/content/state-usury-laws-legal-interest-rates/

Illinois

Interest Rate Limits

personal loans 9%

Exception

no exceptions

More Information

Interest Act – Illinois Law
Illinois Usury Law – UsuryLaw.com
Illinois Interest Rate Laws – FindLaw.com

Re: SOFI Personal Loan Not Available Due to IL Law?

John02 — Sun, 08 Jan 2017 22:34:09 GMT

Interesting. I looked into the links you have before some more and it doesn't seem like that 9% is across the board, or that it doesn't apply to banks and some other institutions. I'm just not sure if SOFI would qualify or not.

From the Find Laws page:

Exceptions

Under Consumer Installment Loan Act (205 ILCS 670/1); short-term loans (815 ILCS 205/4.1a); installment loans (815 ILCS 205/4a; 205 ILCS 670/15); pawnbrokers (§205 ILCS 510/2); farm development loan (20 ILCS 3605/5 to 3605/12); reverse mortgage loan (205 ILCS 305/46)

From the Interest Act link that you had below I found this section on installment loans that mentions the 9% rate with some exceptions for banks and other institutions. So I know SOFI isn't a bank, but I wonder if they would qualify under the 3rd exception.

  (815 ILCS 205/4a) (from Ch. 17, par. 6410)
    Sec. 4a. Installment loan rate.
    (a) On money loaned to or in any manner owing from any person, whether secured or unsecured, except where the money loaned or in any manner owing is directly or indirectly for the purchase price of real estate or an interest therein and is secured by a lien on or retention of title to that real estate or interest therein, to an amount not more than $25,000 (excluding interest) which is evidenced by a written instrument providing for the payment thereof in 2 or more periodic installments over a period of not more than 181 months from the date of the execution of the written instrument, it is lawful to receive or to contract to receive and collect either:
        (i) interest in an amount equivalent to interest

computed at a rate not exceeding 9% per year on the entire principal amount of the money loaned or in any manner owing for the period from the date of the making of the loan or the incurring of the obligation for the amount owing evidenced by the written instrument until the date of the maturity of the last installment thereof, and to add that amount to the principal, except that there shall be no limit on the rate of interest which may be received or contracted to be received and collected by (1) any bank that has its main office or, after May 31, 1997, a branch in this State; (2) a savings and loan association chartered under the Illinois Savings and Loan Act of 1985, a savings bank chartered under the Savings Bank Act, or a federal savings and loan association established under the laws of the United States and having its main office in this State; or (3) any lender licensed under either the Consumer Finance Act or the Consumer Installment Loan Act

Re: SOFI Personal Loan Not Available Due to IL Law?

heavyjay — Mon, 09 Jan 2017 00:33:56 GMT

I don't know how much you applied for but their website says the minimum loan amount for IL and a couple other states is $10,001.

SoFi Personal Loans are not available to residents of MS and NV. Maximum interest rate on loans for residents of AK, OK, TX and WY is 9.99% APR, for residents of ME is 12.24% APR and for residents of CO, CT, HI, KS, SC, VA is 11.99% APR. Personal loans not available to residents of Michigan who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, IL, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Variable rates not available to residents of AK, IL, OK, TX, WY.