Payday loans, also known as cash advances or paycheck advances, are short-term loans that are typically due for repayment on the borrower’s next payday. While payday loans can be tempting for those who need quick cash, they can also lead to debt traps and financial hardship. It is important to understand the laws regarding payday loans in your state before considering taking out such a loan. In Harriman, New York, payday loans are prohibited by state law.
How Payday Loans Work
Payday loans typically involve borrowing a small amount of money, often a few hundred dollars, to cover unexpected expenses or bridge the gap between paychecks. The borrower provides a post-dated check or authorizes an electronic debit for the loan amount plus fees, which are usually around $15 to $30 per $100 borrowed. If the borrower does not have enough money in their bank account to cover the loan and fees on the due date, they may be charged additional fees or penalties and may be trapped in a cycle of debt.
Payday lenders do not typically consider a borrower’s ability to repay the loan before approving the application. Instead, they rely on the borrower’s income and the fact that they have a job and a bank account. This can lead to borrowers taking out loans they cannot afford and becoming trapped in a cycle of debt as they take out more loans to cover the previous ones.
Payday Loans in Harriman, New York
In New York, payday loans are prohibited under state law. This means that payday lenders are not licensed to operate in the state and therefore cannot lend money to consumers. This is intended to protect borrowers from high fees and other predatory practices associated with payday loans.
The state of New York has been particularly aggressive in cracking down on payday lenders. In 2013, the New York State Department of Financial Services (DFS) sent cease-and-desist letters to 35 online payday lenders operating in the state and imposed fines totaling $1.2 million. The DFS has also taken legal action against payday lenders who have attempted to operate outside of the law.
Interesting Facts and Statistics About Payday Loans in Harriman, New York
- Payday loans were banned in New York in 2005 under the state’s usury laws, which cap interest rates at 25%.
- In 2016, the average annual interest rate for payday loans in New York was 369%, according to the Center for Responsible Lending.
- A survey by the New York State Department of Financial Services found that 77% of payday loans made in New York were taken out to pay off previous payday loans.
- In 2019, the DFS imposed fines totaling $3.5 million on eight payday lenders who had been operating illegally in the state.
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While payday loans are prohibited in Harriman, New York, there may be other options available if you are in need of quick cash. TheGuaranteedLoans is a connector service that can put you in touch with potential lenders who may be able to offer you a loan that meets your needs. We are not a direct lender, but we will work with you to find a lender that is right for you. Apply now on our website to get started.