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Payday Loans in New York
Payday Loan Laws in New York (2026)
No — payday loans are illegal in New York. The state has no payday-loan license at all: interest is capped at 16% (civil usury) and 25% (criminal usury), far below any payday rate, so a payday loan made to a New Yorker is void and uncollectible. The ban applies in person, by phone, and online.
| Status | Prohibited — payday lending is illegal |
|---|---|
| Civil usury cap | 16% per year |
| Criminal usury cap | 25% per year (a felony above this) |
| Illegal loans | Void — the lender and any collector cannot legally collect |
| Applies to | In-person, phone, and online lenders alike |
| Enforcement | Department of Financial Services; New York Attorney General |
| Law | N.Y. Penal Law §§ 190.40–190.42; Gen. Oblig. Law § 5-501; Banking Law § 14-a |
What New York's ban means for you
- No licensed payday lenders operate in New York. Any business making these loans here is breaking the law.
- Online and out-of-state lenders are not exempt. A payday loan offered to a New York resident is illegal no matter where the lender is based.
- A payday loan above the usury cap is void — you may not owe the illegal interest, and debt collectors are barred from collecting it. Get legal advice before paying.
- Watch for disguised payday loans: in 2025 the Attorney General sued cash-advance and earned wage access apps as alleged illegal payday lenders.
Problem with a lender? File a complaint
Payday lending is illegal in New York and is enforced by the Department of Financial Services and the Attorney General. To report a violation or an illegal lender, use the online complaint form.
Legal options instead of a payday loan
Legal alternatives in New York include a payday-alternative loan (PAL) from a credit union, an employer paycheck advance, nonprofit credit counseling, or a payment plan with the biller. See our guide to payday loans and alternatives.
Your debt rights in New York
A lender can garnish wages in New York only after it sues and wins a court judgment, and federal law then caps how much can be taken. New York does not run a statewide payday-loan database, so limits on how many loans you can hold are harder to track from lender to lender. Your rights when you cannot repay are set by a mix of federal and state law — these guides explain how they work:
- Can a payday lender sue you?
- Can payday loans garnish your wages?
- Do payday loans affect your credit?
- Payday loan statute of limitations
- How many payday loans can you have?
- How to get out of payday loan debt
Disclaimer: general information, not legal or financial advice. Laws change — verify the current rules with the New York State Department of Financial Services (DFS) before borrowing. Last reviewed 2026.
Sources
Frequently asked
Are payday loans legal in New York?
No. Payday lending is illegal in New York. Usury law caps interest at 16% (civil) and 25% (criminal), well below payday rates, so these loans cannot be made legally.
Can I get a payday loan online in New York?
No. The ban covers online and out-of-state lenders too — a payday loan offered to a New York resident is illegal regardless of where the lender is located.
Do I have to repay an illegal payday loan in New York?
A loan made above the usury cap is void, and collectors are barred from collecting it. Speak with a lawyer or legal aid before paying anything.
Who do I report an illegal payday lender to in New York?
The New York State Department of Financial Services and the New York Attorney General's office.
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