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Payday Loans New York


Payday loans in New York

Just think that in the middle of the month you are low on the pocket, and you need an emergency payment. What’ll you do? With out a second thought you will think of a ‘cash advance’, also known as a payday loan. For anyone who suffers from strong financial crisis, these financial loans offer short-term cash assistance. This is a very short-term loan and you can pay it back after two-three weeks. You can pay the amount back on the next payday and hence the name payday loans. It is the fast cash that you can trust on it when you suffer from emergency cash needs. So until you receive your next pay, you can move your budget with the loan amount. So it is very simple to get a payday loan, but the same time it is very expensive.

The loans are now available as online and offline. In New York payday loans are obtained from a variety of sources as payday loan companies that are nationally chains and locally owned, some check cashers, pawnshops, and also Internet and are marketed via, toll-free telephone numbers.


Know what is it and when it started

From 1990’s onwards Cashnet and Telecash (the partners of the County Bank of Rehobeth Bach, Del) have started offering payday loans to New York consumers through radio, television, circulars in sub way trains, websites and newspaper advertisements. For the consumers who have a checking account and a minimal monthly income they were offering short-term loans. And the response was amazing………

Now in Payday loans in New York are generating nearly $45 billion in revenue last year. Without any doubt we can say that it is one of the fastest growing segments of fringe banking economy. These small-dollar loans normally varying from $100-$500, generally bear an interest rate of 500 percent, if you calculate on an annualized basis. But according to law of New York, charging more than 16% for these types of loans is strictly prohibited. It is surprising to know, there are about 24,000 outlets make 95 to 100 million loans a year worth $25 to $27 billion, and generate over $4 billion in fees.

Know how it works

If you are interested to take payday loan, you will be getting application requesting information relative to your employment or other income and details about your account. If you are approaching Cashnet or Telecash, in details you cannot trace that the County Bank is the lender, but rather identifies Cashnet or Telecash as the source of the loan. After approving you will be getting documents for further verification. Remember that the loan documents include a Disclosure statement, a customer Authorization form, a loan note and a loan payment instruction form. For extending the loan you have to prove the existence of a bank account, proof for salary or your other source of income.

Know in depth…

• The money will be transferred to your account in the next business day itself.

• The interest rate that you have to pay is comparatively high, as for every $100 you borrow, the average interest rate is $30. So if you want a loan for $100 you have to apply for $130. If you calculate the APR (Annual percentage rate), you can witness that the amount will exceed to 500%.

• The maximum rate allowed in New York is 16% and for payday loans, in most of all the cases the APR may exceed the maximum.

• Always look for an entity licensed as a small loan company or a bank as New York permits to make payday loans after these conditions.

• Always remember that no entities licensed by the Banking Department engage in this particular type of business in New York but out of state companies encage in this type of business.

• No non-bank company is permitted to charge an annual interest rate that is in excess of 25% as the law wont permit it even if the firms is licensed as a Licensed Lender under Article 9 of the Banking Law. But there is a possibility that the banks may exceed the rate of interest than permitted in their home state.

Rollovers-have a close look

The idea of Payday loans in New York is to repay the amount on the next payday. But if are having a financial crisis then the company allows you to rollover the amount. These rollover options are known as additional payment options and you can use two rollover options. There are tow types of rollover options and in one type you can lengthen the repayment period by one more day and allowing the lender to debit only the amount of the finance charge from your checking account on the original payment date. You are allowed to use this chance for three consecutive times.

In the second rollover option at the time you authorize the creditor to debit the amount of finance charge from your account and also an amount for the partial payment of loan amount of $50 on the payment date.

Some of the companies charge a fee, of say $35 and you can take a two-week advance of $120. To get the amount you have to give the check for $155 that the firm will hold until your next payday. Cashnet and telecast carry interest rate exceeding 500% under New York’s usury laws.

The offer behind payday loan is the ‘easy way out of debt’. But be careful about the terms and conditions of the company, as there will be some companies waiting with offers to trap you. Some of the companies will be having very high interest for these short-term loans. The payday firms are waiting to capture people who are in high debt or having a past of using high-risk lenders, young customers, and people with limited knowledge in finance. Surveys conducted by various states of New York found that in contrary to the statement of short-term loans, most of them rollover it numerous times and the repayment is many times the face value of the loan in interest.

Legal or illegal

Are you in doubt about the legal aspect in New York? Payday lending is illegal in New York. The civil usury cap is 16% interest a year according to New York General Obligations Law § 5-501 and New York Banking Law § 14-a, subd. But eight states have no border on payday loan finance charges. So normally a question that arises is that, if payday lending is illegal in New York, then why are payday lenders markets in New Yorkers. Claim is that it is just brokering loans for the banks.

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