Prejudgment Interest Rules in Illinois

At a glance

Requirements one by one

Governing law and rates

Under 815 ILCS 205/2, creditors “shall be allowed” 5% annual interest on listed overdue money, including amounts due on bonds, bills, promissory notes, and other written instruments. In a different track, 735 ILCS 5/2-1303(c) awards 6% annual prejudgment interest on qualifying personal-injury and wrongful-death judgments. The 9% and government 6% rates in § 2-1303(a) concern interest after judgment; they are not the tort prejudgment rate.

When interest begins

The Interest Act begins its written-instrument track when money becomes due. Section 2-1303(c) begins the injury/wrongful-death clock when the action is filed, tolls it between a voluntary dismissal and refiling, and limits accrual to five years. For an injury before the July 1, 2021, effective date, its text starts interest on the later of filing or that effective date.

Contract and tort treatment

The Interest Act’s listed debt categories require their own qualifying facts. New Hampshire Insurance Co. v. Hanover Insurance Co., 296 Ill. App. 3d 701 (1998), explains how a determinable amount on a writing can qualify even if the parties dispute liability. Cotton v. Coccaro, 2023 IL App (1st) 220788, describes the 2021 addition of the separate injury/wrongful-death rule.

Government defendants

Section 2-1303(c) expressly excludes the State, a unit of local government, a school district, a community college district, and any other governmental entity from the injury/wrongful-death prejudgment-interest obligation.

What trips people up

The offer rule in § 2-1303(c) has two distinct outcomes. If a timely written defendant offer is less than the final judgment, interest is calculated on the judgment amount minus the offer, after statutory exclusions. If the final judgment is equal to or less than the qualifying offer, no prejudgment interest is added. The statute sets a 12-month offer window and a 90-day acceptance condition.

The section removes punitive damages, sanctions, statutory attorney’s fees, and statutory costs from the interest base. Neither cited interest statute expressly states a compounding method; the five-year limit states how long interest accrues.

Common questions

Does the 6% tort rule begin on the injury date? No. Section 2-1303(c) starts it when the action is filed, subject to the pre-2021 transition rule.

Is a government entity covered by that tort rule? No. Section 2-1303(c) expressly excludes the named government defendants.

Statutes and sources

• 815 ILCS 205/2, official Interest Act text, accessed 2026-10-06: https://www.ilga.gov/Legislation/ILCS/Articles?ActID=2322&ChapterID=67&Print=True
• 735 ILCS 5/2-1303(a), (c), official Code of Civil Procedure text, accessed 2026-10-06: https://www.ilga.gov/documents/legislation/ilcs/documents/073500050K2-1303.htm
• Cotton v. Coccaro, 2023 IL App (1st) 220788, and New Hampshire Insurance Co. v. Hanover Insurance Co., 296 Ill. App. 3d 701 (1998), retrieved 2026-10-06.