New York · checked October 24, 2026

Payday loans in New York: the rules and your way out

Typical payday loans not allowed

Payday loans are illegal in New York, whether made in person, by phone or online, because they exceed the state's 16% civil and 25% criminal usury limits, and usurious loans are void.

Law: N.Y. General Obligations Law 5-501, 5-511; N.Y. Banking Law 14-a, 340, 373; N.Y. Penal Law 190.40, 190.42. NYSenate.gov Open Legislation, most recent revisions shown: GOL 5-501 and 5-511, Banking Law 14-a, 340 and 373, Penal Law 190.42 (2014-09-22); Penal Law 190.40 (2015-05-08); read 2026-10-24

New York's rules, line by line

Fee or rate cap: Civil usury: the maximum rate under General Obligations Law 5-501 "shall be sixteen per centum per annum" (Banking Law 14-a(1); GOL 5-501(1)-(2)), counting all amounts paid to the lender for making the loan. Criminal usury: knowingly charging interest "at a rate exceeding twenty-five per centum per annum" is a class E felony (Penal Law 190.40), and a class C felony as part of a usurious lending business (Penal Law 190.42). Lenders making loans of $25,000 or less to individuals at more than the civil rate must be licensed (Banking Law 340).
Payment plan if you cannot pay: No. New York has no payday lending statute and no payday extended payment plan.
State loan database: No.
Limits on collection: Contracts charging more than the 5-501 rate are void, and the court "shall declare the same to be void, and enjoin any prosecution thereon, and order the same to be surrendered and cancelled" (GOL 5-511). DFS says it is illegal for a debt collector to collect, or try to collect, a payday loan in New York, and advises borrowers whose lender keeps debiting after a stop-payment request to tell their bank. Licensed check cashers may not make loans or cash or advance money on post-dated checks, apart from next-business-day government and payroll checks (Banking Law 373(1)).
Other rights: Borrowers can report payday lending or payday debt collection to DFS by phone or through the DFS complaint portal, and can also complain to the CFPB and FTC (per DFS).

If you are behind on a payday loan in New York

Check whether the loan was legal to make. New York does not allow payday loans at typical payday prices. If a lender charged more than the state's limit, report it to the New York State Department of Financial Services (DFS) through its complaint page.
Stop the automatic withdrawals if they are emptying your account. You can revoke the lender's permission to debit your account and tell your bank. How to do it.
Look at a credit union payday alternative loan. Federal credit unions can lend $200 to $2,000 at much lower cost. How they work.
Talk to a nonprofit credit counselor. A counselor can look at all your bills, not just this one. How to find a real one.

Check a lender, or report one

Sources

N.Y. General Obligations Law 5-501, Rate of interest; usury forbidden, read 2026-10-24
N.Y. General Obligations Law 5-511, Usurious contracts void, read 2026-10-24
N.Y. Banking Law 14-a, Rate of interest, read 2026-10-24
N.Y. Banking Law 340, Doing business without license prohibited, read 2026-10-24
N.Y. Banking Law 373, Acts prohibited (check cashers), read 2026-10-24
N.Y. Penal Law 190.40, Criminal usury in the second degree, read 2026-10-24
N.Y. Penal Law 190.42, Criminal usury in the first degree, read 2026-10-24
NYDFS, Predatory Loans and Loan Scams (Payday Loan section), read 2026-10-24
NYDFS, File a Complaint, read 2026-10-24
NYDFS, Who We Supervise (Who We Supervise App), read 2026-10-24

This page summarizes the law; it is not legal advice. Laws change, and the statute and regulator control. If something here is out of date, write to hello@paydayloan.help.