Payday Loans

New York Payday Loan Laws

There are several New York payday loan laws that have prohibited extremely high-rate short-term cash advances in this state. Though short-term lending is still allowed in the state of New York, small loan rate cap (as part of the usury laws) applies, as per which, lenders cannot charge a 3-digit APR (annual percentage rate). Besides that, only licensed lenders can issue these types of cash advances. If a lender is not duly licensed to issue payday loans in New York, you can file a complaint against them and take legal actions.

Where To File Complaint Or Get More Detailed Information?

When it comes to payday lending, New York State Banking Department is the regulatory authority. Their office is located at One State Street New York NY 10004. You can also contact them on phone at 1-877-BANK-NYS.

Some Important Points To Note

Following are some of the most important points that you must be well aware of about the New York payday loan laws.

- In the state of New York, it is illegal for the check cashers to cash checks with deferred dates.
- Only licensed mainstream Lenders can offer short-term cash advances.
- The criminal usury cap is 25% p.a.
- The civil usury cap is 16% p.a.

What To Do If You Are Still Offered A Payday Loan At High Interest Rate?

The first thing that is very important for you to keep in mind is that Internet payday lenders also need to follow the laws applicable in your state. Some online lenders claim that the New York payday loan laws do not apply to them because their office is located in other state (where payday lending is legal) or because they are operating their business from Internet. This is not true. If you are being harassed by a payday lender, you have the right to file a complaint against them with the New York State Banking Department. If you have borrowed a cash advance at extremely high rate, you will still have the obligation to repay at least the principal amount; the lenders cannot force you to pay interest on a loan that was issued illegally at the first place.

The bad news is that New York payday loan laws are not free from loopholes. Internet payday lenders are very difficult to locate, and therefore, it is often almost impossible to take any legal actions against them. Therefore, you have to be very careful. The best strategy is to avoid borrowing this type of loans, especially from those payday lenders who operate their business from Internet.


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Posted in Payday Loan Laws, Payday Loans | 1 Comment »

One Response to “New York Payday Loan Laws”

  1. Jack says:

    Very wisely described. It is really an informative article on the law of lending in New York. Loans which are associated with interest rate in hundreds per year have been banned however loans with low interest rates can be granted through approved institutions. You can complain against non approved institutions approaching you to lend the money. You can get all the information through the State Bank of the state. The companies which are offering high interest rates and operating through online lending are also abide by this law of state It is irrespective of the fact from where thy are operating or registered. It is your basic right to complain against any such lenders who offer you a loan on high interest rates. You are only liable to pay back the principle amount and not the interest amount. There is also a drawback of such loan institutions that we can not get there exact locations as they are not registered with any state authority and it will be difficult to file a case against them. It will be in the favor of the borrower to ignore these offers.

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