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New York Payday Loan Laws
Are you thinking about getting a payday loan or other type of online loan in New York? Here is what you should know.
Payday loans are illegal in New York State. The state prohibits the making of payday loans in-person, by telephone or online. It is also a violation of the law for a debt collector to make any attempts to collect the debt on a payday loan. Payday lending is also illegal in New Jersey.
However, you can take out a small loan in New York from a registered lender, and rates will be capped at 25% APR.
The Department of Financial Services is the regulatory authority you can turn to if you believe payday loans are being issued in New York.
The Advantages of Online New York Loans
Why Is Payday Lending Illegal in New York?
- Due to its short-term nature, borrowers often cannot afford to repay the loan in time. This may result in being trapped in debt;
- If the loan cannot be paid back at the end of the term, a borrower is forced to renew or extend the loan term. Fees are charged for each of these transactions;
- The APR on payday loans are extremely high, around 400% or higher;
- If the borrower’s account does not have the required amount, this results in extra charges in the form of insufficient funds fee.
New York Payday Loan Regulations
| Legal Status | Prohibited |
| Interest Rate (APR) | 25% small loan cap |
Although payday lending is prohibited in New York, loans are still an option. Lenders need to be licensed to operate in the state and there is a small loan cap of 25% APR on all loans.
This means you can get a loan in New York, but lenders are prohibited from setting high APR rates.
Get the Loan You Need
An online personal loan can help when you need cash for large purchases or unplanned expenses.
Other Type of Online Loans Are Still Available
Although payday lending is illegal in New York, other loan types might be available.
You can apply for online personal loans, get a credit card, or take out a conventional loan from a bank.
Compare available online loan options in New York above on this page.
Laws Governing Lending in New York
The check cashing of postdated checks is not allowed in the state. Every lending business must obtain a license before starting its operations.
The state laws impose a small loan cap of 25% and not more than that. The New York banking law has enforced a civil usury cap that equates 16% per annum.
Keep in mind that it is always advisable to read all the paperwork including fine print before you apply for any kind of credit. In the same breath, have a solid plan to repay your loan on time to avoid accumulating debt.
Why Compare Personal Loans at Financer.com
Compare New York Loans at Financer.com
Financer.com helps you compare the best personal loans in New York and get the best loan rates from leading lenders.
We look for lenders that offer full transparency and have a long track record of successful lending and satisfied customers. We are always improving our comparisons, but are confident in what we can bring to market, and we know you will be as well.
Use our free loan comparison tool to find the right personal loan in New York and take the guesswork out of doing all the legwork yourself.
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Loans in New York - FAQs
Are payday loans legal in New York?
What rates can I expect for a New York loan?
A small New York loan has a maximum APR of 25%.
Can lenders operate in the state of New York?
Yes. However, every lending business has to be licensed to operate in the state. State laws impose small loan cap of 25% APR for any loans, and debt collection or an attempt at debt collection on a payday loan is considered illegal as well.
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