Payday loans can be a quick and easy way to access cash when you need it. However, in Severance, New York, payday loans are illegal.
What are payday loans?
A payday loan is a short-term loan that usually needs to be repaid within two weeks to a month. The loan amount is typically small and ranges from $100 to $1,000. The loan is disbursed quickly, often within the same day as the application. Payday loans are usually used to cover emergency expenses like car repairs, medical bills, or rent payments.
Why are payday loans illegal in Severance, New York?
Payday loans are prohibited in the state of New York. This is because of the high-interest rates associated with payday loans and the predatory nature of the industry. In New York, lenders are not allowed to charge an interest rate above 25% per year for loans under $2,500. However, payday lenders charge interest rates of up to 400%, making it difficult for borrowers to repay the loan.
What are the alternatives to payday loans in Severance, New York?
Since payday loans are illegal in Severance, New York, there are alternative options for borrowing money. Some of these options include:
- Credit unions – Credit unions offer low-interest loans to their members. They are a non-profit organization and typically have lower interest rates than banks or other lenders.
- Personal loans – Personal loans are a type of installment loan that can be used for a variety of purposes. They typically have lower interest rates than payday loans and can be repaid over a longer period of time.
- Credit cards – Credit cards can be used to cover emergency expenses. However, they usually have high-interest rates and should only be used if you can pay off the balance in full within the grace period.
- Borrow from family or friends – If you are in a bind, consider asking a friend or family member for a loan. However, make sure you repay the loan on time to avoid damaging the relationship.
Interesting facts about payday loans in Severance, New York
- New York was the first state to ban payday loans in 2009. Since then, 14 other states have followed suit.
- The Consumer Financial Protection Bureau found that the average payday loan borrower takes out 10 loans per year and spends almost 200 days in debt.
- The average annual interest rate for a payday loan in the United States is 391%.
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While payday loans are illegal in Severance, New York, emergencies can still happen. If you need a loan, consider alternative options like credit unions, personal loans, or borrowing from friends or family. If you are struggling to find a lender, TheGuaranteedLoans can help connect you with potential lenders. Fill out an online application today to see if you qualify.
Note: TheGuaranteedLoans is a connector service, not a direct lender. We do not make loan decisions and are not involved in the lending process. We simply connect borrowers with potential lenders who may be able to offer them a loan.