Payday Loans in Plymouth, New York
Payday loans, also known as cash advances, are short term, high-interest loans that are typically meant to be paid back on the borrower’s next payday. However, in the state of New York, payday loans are prohibited by state law. This is due to the high interest rates and fees that payday lenders often charge, which can lead to a cycle of debt for borrowers.
What are the Laws Regarding Payday Loans in New York?
New York State has strict laws regarding payday lending. The state’s usury laws prohibit lenders from charging more than 25% annual interest on a loan. Additionally, any loan with an interest rate over 16% is considered illegal. This effectively makes payday lending illegal in the state of New York.
Why are Payday Loans Prohibited in New York?
Payday loans are considered to be predatory lending practices because they often trap borrowers in a cycle of debt and high-interest rates. Many borrowers are unable to repay the loan by the next payday, which can lead to additional fees and interest charges. This can quickly spiral out of control and lead to financial ruin.
Alternatives to Payday Loans in New York
For those in need of short-term assistance, there are several alternatives to payday loans available in New York.
- Credit unions: Credit unions typically offer small loans at lower interest rates than traditional banks or payday lenders.
- Community development financial institutions (CDFIs): CDFIs are non-profit organizations that provide financial services to low-income communities, including small loans with reasonable interest rates.
- Paycheck advance: Some employers offer paycheck advances for employees in need of short-term financial assistance.
Interesting Facts about Payday Loans in New York
- The average interest rate for a payday loan in New York is 685% APR.
- In 2019, the New York State Department of Financial Services fined a payday lender $3 million for charging excessive interest rates on loans.
- New York is one of 14 states and the District of Columbia that prohibit payday lending.
Apply Now
While payday loans are prohibited in New York State, TheGuaranteedLoans can still help you find other short-term loan options. As a connector service, we work with a network of potential lenders who may be able to provide you with the funding you need. Fill out our online application form today to get started.
Note: TheGuaranteedLoans is not a direct lender and does not provide payday loans. We simply facilitate the connection between borrowers and potential lenders, and we do not charge any fees for our service.