If you’ve found yourself short on cash and need to borrow a small amount of money, you may be considering a payday loan. Our guide will give you the other options you need to make a good decision.
Why aren’t payday loans legal in New York?
NY Banking Law 373 bans check cashers from making loans or advancing cash, and NY Penal Code 190.40 caps interest at 25%. This effectively makes it illegal for payday lenders to operate, both in-store and online.
Even though you can’t get a payday loan in New York, you should still familiarize yourself with the laws and read all the paperwork of a loan before signing. It’s important that you can repay what you borrow so you can avoid having more debt in the future.
What other options do you have for a loan in the state of New York?
While you can’t get a payday loan in New York, you have other options to consider.
Credit card cash advance. If you have a credit card, you may be able to take out an advance against your line of credit. While this can also be expensive, the loan terms are longer than with a payday loan.
Find a way to make extra cash. Depending on your schedule, you might consider getting a second job for an alternate source of income. This doesn’t cost you anything and could help you pay down your debt faster.
Tribal loans. Tribal loans may still be available to you in New York. However, it’s important to keep in mind that these carry high interest rates and are often quite expensive. Be sure you know how much the total loan will cost before you borrow and budget for the payments to keep yourself from being charged late fees.
Pay advance apps. These apps can provide cash before your next paycheck based on how many hours you work.
Loan connection services. These sites may be able to find a lender willing to offer you a small-dollar loan. Keep in mind that the lender you’re ultimately connected with must have rates and fees that abide by New York’s law.
In addition to these options, New York offers a few programs to help people with low to moderate incomes who are struggling with their daily expenses. Programs like Earned Income Tax Credit (EITC), Medicaid and the Home Energy Assistance Program (HEAP) can help you cover bills while you work on straightening out your budget.
Another option: A credit card designed for those looking to build credit
While a credit card won’t help you with your short-term cash needs tomorrow, if you apply for a card designed for those with low or no credit history, you can get the line of credit that you need to make purchases and build positive credit history in the meantime.
Many loans have compounding interest and financing fees which are represented as an annual percentage rate (APR). In New York, this is capped at 25%. If you make a late payment or miss one entirely, you will likely have to pay a fee, and your lender can charge you a non-sufficient funds (NSF) fee if you don’t have enough funds in your account to complete a payment. The amount you pay in fees depends on the lender and the type of loan you take out.
Bottom line
Although you can’t take out a payday loan in New York, you still have other ways to get a little help with your finances. If you find yourself constantly short on money, you can also consider speaking with a credit counselor.
Do you have any more questions about payday loans in New York?
The high APR and fees borrowers have to pay make many people feel that payday loans are predatory.
You can get in touch with the Department of Financial Services or the Consumer Financial Protection Bureau.
No. Like payday loans, these have high interest and the possibility of your car being repossessed if you default so New York has made them illegal.
Matt Corke is Finder's head of publishing for rest of world and New Zealand. He previously worked as the publisher for credit cards, home loans, personal loans and credit scores. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time, he has survived the dot-com crash and countless Google algorithm updates.
If I personally loan money to my business, what is the maximum interest rate I can charge the business for the loan? From this website it looks like 25%, but I would like to make sure. Also, what other fee’s am I able to charge? The business is in Buffalo New York if that helps.
Thanks for getting in touch with finder. I hope all is well with you. :)
Yes, it is true that the NY Penal Code 190.40 caps interest at 25%. Other fees that may apply would depend on the lender. It would include late payment fees and other penalties.
Since payday loans are not allowed in New York, you may want to check our page that lists small business loans.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
The short answer is no. But the long answer is a soft maybe.
If your permanent residence is in a state that allows payday loans but you’re temporarily living in another state, you may be able to get a loan. Getting a payday loan could require more interaction with the provider to confirm your permanent residence versus your temporary one.
Whether you’re applying online or in store, there’s no guarantee that the lender will approve you — even if you’re only temporarily in another state.
I sold my house in Florida and moved to NYC.
I need to pay extended security deposit for the rental apartment. The closing day of the house when I get the money is a week after the starting day of the rental contract and I must pay the money before that day. I have all the documents proving the sales of the house and I need to borrow money just for one week period. Is there anyway to do that in NYC?
Payday loans are not available in New York, though some cash advance or installment loans are. Use the table above to choose a provider based on your loan needs and click “go to site” to begin an application.
Thanks for your question! While we can’t tell you exactly where to go for your loan, you might be interested in checking out our tribal loan options but beware as these can come with very high-interest rates. You might also want to consider getting a credit card.
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If I personally loan money to my business, what is the maximum interest rate I can charge the business for the loan? From this website it looks like 25%, but I would like to make sure. Also, what other fee’s am I able to charge? The business is in Buffalo New York if that helps.
Thank you in advance for your help!
Hi Loan Guy,
Thanks for getting in touch with finder. I hope all is well with you. :)
Yes, it is true that the NY Penal Code 190.40 caps interest at 25%. Other fees that may apply would depend on the lender. It would include late payment fees and other penalties.
Since payday loans are not allowed in New York, you may want to check our page that lists small business loans.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
What if I live in New York State and I was issued a pay day loan unaware that it is illegal in the state?
Hi Adam,
Thanks for leaving a question on finder.
The short answer is no. But the long answer is a soft maybe.
If your permanent residence is in a state that allows payday loans but you’re temporarily living in another state, you may be able to get a loan. Getting a payday loan could require more interaction with the provider to confirm your permanent residence versus your temporary one.
Whether you’re applying online or in store, there’s no guarantee that the lender will approve you — even if you’re only temporarily in another state.
You can consider getting a credit card instead or tribal loans.
Cheers,
Joel
I sold my house in Florida and moved to NYC.
I need to pay extended security deposit for the rental apartment. The closing day of the house when I get the money is a week after the starting day of the rental contract and I must pay the money before that day. I have all the documents proving the sales of the house and I need to borrow money just for one week period. Is there anyway to do that in NYC?
Hi Inna,
Thank you for your inquiry.
Payday loans are not available in New York, though some cash advance or installment loans are. Use the table above to choose a provider based on your loan needs and click “go to site” to begin an application.
I hope this information has helped.
Cheers,
Harold18
Where can I borrow $750.00 in nyc?
Hi James,
Thanks for your question! While we can’t tell you exactly where to go for your loan, you might be interested in checking out our tribal loan options but beware as these can come with very high-interest rates. You might also want to consider getting a credit card.
Cheers,
Anna