Payday loans in New York: illegal under usury law

What the law says

• Payday loans are illegal in New York under both civil and criminal usury statutes (NY DFS ↗).
• Loans under $250,000 by non-bank lenders above 16% a year are civil usury; loans above 25% a year are criminal usury (NY DFS ↗).
• Lenders not licensed by New York cannot charge more than 16% on personal loans of $25,000 or less; licensed lenders can charge up to 25% (NY Attorney General ↗).

Collecting payday debts

DFS has sent letters to debt collectors stating that it is illegal to attempt to collect a debt on a payday loan in New York (NY DFS ↗). It has also ordered online companies to stop offering illegal payday loans to New Yorkers (NY DFS ↗).

Banks and credit cards

Because of federal law, New York’s usury rates do not apply to most banks and credit cards (NY Attorney General ↗).

Report an offer

Contact the New York Attorney General’s Consumer Frauds Bureau at (800) 771-7755 (NY AG ↗) or the Department of Financial Services.

Options in New York

• A payday alternative loan from a federal credit union (APR capped at 28%).
• A cash advance app — compare costs with our fee calculator.
• Asking the company you owe for more time or a payment plan.
• If you already owe a payday loan: extended payment plans and getting out of payday debt.

Questions

Can I get an online payday loan in New York?

Not legally. DFS treats payday loans to New Yorkers as illegal, including those made over the internet.

What if a collector contacts me about a payday loan?

DFS has said it is illegal to try to collect payday loan debts in New York. Report it to DFS or the Attorney General.

What rate is legal for a small loan in New York?

Up to 25% from a licensed lender, 16% from an unlicensed one, under the Attorney General’s summary.