loans in New York
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.
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
what is it and when it started
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………
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.
how it works
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.
The money will be transferred to your account in the next business
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.
a close look
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
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
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
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.
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.