If you’ve found yourself short on cash and need to borrow a small amount of money, you may be considering a payday loan. However, New York is one of several states that consider payday loans illegal. Our guide gives you cheaper options that may be able to help you borrow money in a bind, and at a much lower cost.
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. That’s because payday loans charge predatory insurance rates, which can run well over 700% APR.
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 to avoid more debt in the future.
Maybe you have bad credit, or maybe you just need money quick, either way there are short-term loan options to consider in your situation.
The top cash advance apps offer a way for you to borrow money without a credit check. And, most cash advance apps offer a way to get funds in one to three business days for free, or instantly for a small fee.
Cash advance apps typically allow you to borrow up to $250 or more per pay period. However, you’ll likely need to show regular direct deposits in your bank account from an employer or other source to be approved. Advance amounts start out low, but with responsible borrowing you can increase that amount over time. Cash advance apps are a cheaper alternative compared to payday loans, and likely less risky.
If your credit is the issue, you may be able to find a bad credit personal loan online or from a local lender. In some cases, you can have your money as soon as one business day after approval. Even bad credit personal loan lenders cap their rates around 35.99%. However, you will need a credit check to apply, most lenders want to see a score of at least 620, but there are lenders that accept lower scores.
These loans are small, unsecured loans typically offered by some federal credit unions. PALs can come in loan amounts from $200 to $1,000, and you may qualify regardless of your credit score. APRs are capped at 28% and you generally have up to six months to repay the loan. However, they don’t offer a quick cash solution, as you typically have to be a member of a PAL credit union for at least a month before qualifying for this type of loan.
You may be able to avoid a loan altogether by asking your employer for an advance on your paycheck. Some employers offer advances or short-term loans to employees, and at a far less cost than any other bad credit personal loans.
The Finder Score crunches 3+ types of short-term loans across 65+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best short-term loans for all credit types, you can see how each short-term loan stacks up against other short-term loans with the same borrower type, rate type and repayment type.
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.
There are a wide variety of assistance plans available in New York that may be able to help in your specific situation.
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 such as short-term loan options or installment loans. If you find yourself constantly short on money, you can also consider speaking with a credit counselor.
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.
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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