Payday loans are illegal in New York State. It is a violation of New York State law to grant payday loans in person, over the phone, or online. It is also illegal for a debt collector to collect, or attempt to collect, a quick loan in New York State. So, if you're looking for a fast loan in New York, you're out of luck.
But what does this mean for those who have already taken out a payday loan?In short, you have no legal obligation to repay the loan. Payday lenders, banks, and other debt collectors may not request to collect payday loans in our state. Banks and credit unions must stop all withdrawals from payday lenders if they so request. You can also close your account to ensure that payday lenders can't continue to access it and open a new account at another bank or credit union. It's easy to find companies offering payday loans in New York.
Just Google “payday loans in New York” and you'll see dozens of local companies offering payday loans, even though it's illegal in New York to grant these loans in person, online or by phone. According to the New York State Department of Financial Services (DFS), these payday loan lenders go unnoticed and offer cash loans to customers who generally have poor credit and can't get a loan from a bank. The DFS states that payday loans are illegal in New York because they are designed to trap borrowers in debt. Due to the short term of the loan, most borrowers cannot afford to repay the loan and pay for their other major expenses. Not to mention that the annual percentage rates on payday loans are extremely high, usually around 400 percent or more, according to the DFS. The state of New York prohibits payday lending through its old criminal and civil usury laws.
It's illegal for any lender to make quick loans, whether in person, over the phone, or online. It's also illegal to collect payday loans in New York. If you decide to get a quick loan, it's important to choose a reliable online lender that will provide you with fair terms and does not drown you in even more debt. To ensure your creditworthiness, you must provide payday lenders with information about your income and checking account. After the online payday loan application process, you will be asked to sign an authorization to withdraw funds from your bank account after the next payday. The FTC closed the deal after discovering that the payday lender “bled out consumers” by promising a single-payday loan, but then automatically debiting consumers' bank accounts for financial expenses every two weeks, in perpetuity. If you don't repay a quick loan, the payday loan company has several legal remedies, such as wage garnishment, wage garnishment, and garnishment.
In cases where the borrower's accounts lack sufficient funds, the payday lender will continue to attempt to withdraw funds. If you've run out of cash and need to borrow a small amount of money, you may be considering a quick loan. As mentioned earlier, many payday lenders require borrowers to provide their checking account numbers in order to automatically withdraw payments from borrowers' accounts using the Automated Clearing House (ACH).