New York Payday Loan Laws and Regulations

Find out if short-term Payday Loans are legal in New York and what amounts, interest rates and repayment terms are set by the state's Legislation.

Legal Payday Loans Online for New York residents Apply online

New york Payday loans Rates and Terms

Legal Status

Legal Status

The status of a loan type according to the Federal laws and regulations. What concerns Payday Loans some states consider them legal, some – illegal and some restrict them in terms of amounts and interest rates.

Maximum APR

Maximum APR

The maximum percentage allowed that actually represents annual cost of your loan. The APR is based on several things, including the amount you borrow, the interest rate and costs you’re being charged, and the length of your loan.


Though you must have heard that traditional Payday Loans are prohibited in New York, you may find other options to get instant cash advance permitted by New York laws. Study the state's rules and regulations concerning short-term loans and find available alternatives.

Table of Contents:

Are Payday Loans legal in New York?

Why are Payday Loans illegal in New York?

New York Payday Loans Laws

New York Payday Loans online laws

Does New York law allow Payday Loans for bad credit borrowers?

New York Payday Loans news  - latest changes

New York Payday Loan alternatives

Are Payday Loans legal in New York?

Short-term Payday Loans in New York are Illegal by Illegal, The Payday Lending legislation covers all the parts of the process concerning:

  • Payday Loan amounts
  • Payday Loan repayment terms
  • Payday Loan online direct lenders
  • Payday Loan stores near you
  • Payday Loan interest rates and other fees
  • Payday Loan collecting practices
  • Payday Loan default penalties
  • The number of outstanding Payday Loans as well as a cooling-off period in-between etc.

Read more: Payday Loans in New York

N.Y. Banking Law 340 et seq.  caps all small loans at 25.00% APR. 

For other details  and information on Payday Loans in New York contact New York Department of Financial Services,

Why are Payday Loans illegal in New York? 

The Government considers Payday Loans too expensive and often associated with lenders' predatory practices. According to NY Attorney General Letitia James, Payday Loans seem quick and easy but they may come with a hefty price. Fees, rollover loans, interest — it all adds
up fast, often to over 900% APR. That's why borrowers must try to avoid getting trapped in an endless debt cycle.
If you have been caught by an illegal payday lender, you can file a complaint with the Consumer Frauds Bureau. Or contact New York Department of Financial Services.

New York Payday Loan laws 

Payday cash advance and other small-dollar loans at the rates higher than New York State’s civil and criminal usury limits are considered
illegal. “Payday loans” are typically small, short-term loans that the borrower agrees to repay on the borrower’s next payday with interest rates as high as 400% APR. In New York, pursuant to N.Y. Banking Law 340 et seq. , charging over 16% APR for loans under $250,000 is illegal and constitutes civil usury. In addition, under NY Penal Law § 190.40, charging interest on a loan or forbearance more than 25% APR is criminal usury in the second degree, a class E felony. It doesn't matter whether the money is lent online, over the phone, through the mail, or in person, payday loans made to New York City’s residents at the APR higher than the one allowed by N.Y. Banking Law 340 et seq.  are prohibited. 

If you haven't succeeded in finding the necessary cash advance, there are always other options to receive the necessary funds in New York: unsecured Installment Loans, bad credit Personal Loans, Title Loans, Check Cashing, Pawn Shops, etc.

New York Payday Loans online laws 

Cash advances (payday loans) from both storefront and online lenders are restricted by 25.00% APR usuary cap by Illegal. It also concerns online lenders which must operate in accordance with all relevant state and federal laws. Otherwise, they may be liable to 25.00% for law violations. 

According to the NY Departent of Financial Services Online Lending Report, New York has experienced a significant growth in online lending during the last several years. Advances in technology and the use of big data have started to change the way some consumers and small businesses gain access to financing. The Department supports innovation and notes that new channels of delivery can play an important role in facilitating access to capital by New York consumers and small businesses. At the same time, the Department must ensure that such innovation is responsible and that alternative lending models do not cause consumer harm, create safety and soundness risks for lending institutions, or create systemic risk in our markets.

The law obligates New York Payday Loan lenders to provide you with a written disclosure of all the rates and fees in the understandable language. You should read them carefully and if you agree acknowledge the notification by signing the contract.

Does New York law allow Payday Loans for bad credit borrowers? 

The average credit score in New York is 692, placing it in the fair range. But it doesn't mean that those who have a worse credit can't apply for the necessary cash advance in New York. 

  • First of all, there're some companies in New York providing similar to Payday loan services to borrowers with both good and bad credit score.
  • Secondly, you can always find a cosigner to increase your chances of being approved for a bad credit Payday Loan.
  • Find out how to improve your credit score and do your best to do it fast. 
  • Or consider taking out a bad credit Installment Loan, or bad credit Personal Loan.

New York Payday Loans news  - latest changes

Advocates debate that as payday loans are thrown out of the market, there will be new consumer-friendly options. Recently, a new type of lenders has appeared. They offer less expensive, amortizing and easier to repay cash advance. As a result, payday loan revenues fell 10% to 20% per year.

But, what VCFA sponsors don’t realize is that such changes will not only eliminate the payday lending industry; it will also destroy all businesses competing with payday lenders by bringing affordable credit to America’s vulnerable communities.

The Government shall understand that it shouldn’t further restrict banks’ ability to innovate and artificial interest rate caps must be abolished.

Of course, consumer lending laws need reform and that regulations must be flexible enough to keep up with innovation. Short-term, high-interest loans are an issue that lawmakers on both sides must find common ground on. Good financial regulation should be based on data and good policy, not just ideas that are politically expedient.

New York Payday Loan alternatives 

If you're looking for instant cash advance in New York but not a Payday Loan, consider other alternative ways to get the necessary funds:

  • Apply for a New York Installment Loan - $1000 - $5000 cash advance repaid over several months or years in equal installments.
  • Take out a Car Title Loan if you own a vehicle to use as collateral.
  • Sell some of your valuable stuff online or at a pawn-shop.
  • Apply for New York Tribal loans. Tribal lenders can avoid the state's caps and limits as they operate outside the state regulations. 
  • Contact creditors to work out a payment plan. They often will offer extensions on bills. Make sure to ask about additional fees or costs.
    Talk to your employer about a paycheck advance. Policies vary by employer, but you may be required to fill out an application detailing why the advance is needed. Usually repayment is deducted from future checks.
  • Consider a loan from a credit union or a cash advance on a credit card. These usually have lower rates than a payday loan. Shop around for the best offer.
  • Find a licensed lender. NYS licensed lenders may provide unsecured loans that are less expensive than those from most payday lenders. Contact the NYS Department of Financial Services or visit for a list.
  • Review your bank’s checking account plans. For a fee, many banks provide plans that transfer money from a savings account, credit card or line of credit to cover overdrawn accounts. Avoid “bounce protection” programs that only cover individual overdrafts.
  • Consider a licensed, not-for-profit credit counseling agency. Budget planners, or credit counseling agencies, can help reduce fees and interest rates, arrange to waive charges, and stop harassing phone calls from creditors. Be sure the agency is licensed and not-for-profit. Contact the New York State Department of Financial Services or visit for a list of licensed budget planners.
  • Review your tax withholdings. If you have been receiving a large tax refund each year, you may want to reduce the amount withheld from your check. It’s better to have money available when you need it, rather than pay interest on loans until the refund comes in.

Advertiser Disclosure

COMPACOM.COM is an independent advertising service that provides information and reviews on various companies to help customers compare them and get the best deal. If the company's page is not marked by "Affiliate Sign" and "Affiliate Disclosure", it means we are not affiliated with this business. We just provide the relevant data to help the company promote its services and let the customers find and get the necessary assistance faster.

COMPACOM.COM is not responsible for any products and services advertised and compared. As you click on any advertising block, you are redirected to the third party's website and it's your responsibility to check all the details of the deal. Neither is COMPACOM.COM liable for other companies' logos, names are trademarks™ or registered® trademarks used on our website. Their use does not signify or suggest endorsement, affiliation, or sponsorship. The main aim of COMPACOM.COM is to provide verified information that is taken from the companies' websites and other public sources and supported by the links to them.

COMPACOM.COM can get some compensation for featured placement of certain sponsored products and services, or your clicking on links posted on this website. But it doesn't impact the way the companies are evaluated. Their rating is based solely on real people's reviews which go through a double verification via phone number and e-mail.

We strive to keep all the information on this site up-to-date and accurate but you should check any rates and terms as well as other product or service information on the provider's website.