Are the payday loans in New York legal? I have many loans I'm not able to repay that are too much. What can I do? I'm a NY state resident. I took out several Internet payday loans during February. They have been paid off well beyond the principal amount. I don't know if I could afford the loans any longer. What advice can you offer me? Askbill More Show less These loans are also known as "cash advance loans,"" "check advance loans," or "deferred deposit check loans" are a frequent pitfall for people. A charge of anywhere between $15 and $30 per $100 borrowed is payable for a loan of $300. For a loan of $300 the borrower is required to present the lender a post-dated, post-dated cheque. The lender will then use this to transfer the payment electronically or the total amount of the loan out of the borrower's account. A "customer service" is a method that allows partial payments to be withdrawn from a bank account. This is particularly risky. The partial payment could be a permanant installment, that will continue even if customers try to stop it. With interest rates that high and the terms of the loan so short it is not surprising that a significant percentage of these loans are rolled over by the borrower over and again until the total fees are an effective annualized interest rate of 390% to 780% APR depending on the amount of times the principal is the principal is rolled. A fun information about payday loans: Wikipedia.org is the most visited online Encyclopedia. They have payday loans listed under Loan Shark. This means that "if high interest rates are present and a product which traps debtors are the main factors that make loan-sharking illegal" The label definitely applies. Quick Tip New York law prohibits payday loans. A debt collector can't try to recover the New York resident's payday loan. The New York State Dept. The New York State Department of Financial Services informed debt collectors that it was illegal to take payday loans in New York. Contact the Department. Department. of Financial Services if a you are a New York resident and a collector attempts to take the cost of a payday loan from you. The Federal Trade Commission offers great information about payday loans alternatives. Payday loans and consumer rights A payday lender could try to collect the debt on its own. The payday lender can transfer the debt to a collection company if the borrower fails to pay. We will go over this further. If the payday lender or collection agency cannot convince you to pay through the standard collection techniques, like letters and phone calls and letters, the payday loaner could bring a lawsuit against you to seek a judgment on the remaining balance. If the lender files a lawsuit and wins a judgment against you, the lender may then take steps to enforce the judgment as allowed by your state law before a civil court. Wage garnishment and bank account levies are the most popular methods of enforcing an order. Not included on this list of actions to enforce your rights are making contact with your employer, calling your neighbours, or seeking warrants for your arrest. Refusing to pay back a loan is a civil however, it is not a criminal offense. Payday lenders frequently make use of threats of arrest for fraudulent checks. This threat isn't valid if the payday lender is not able to prove that the borrower intended to repay the loan. It can be very difficult to prove. Also, remember that nobody has been detained or jailed in the United States for debt since the time of the Civil War. If a payday lender decides to sell the account to collection agencies the borrower is required to pay the balance. Editor's note This page is not open for comments. Payday loans offers information on how to get payday loan in new york - http://a8audi.ru/ - loans. Check out the Bills.com information on payday loans in California, Florida. Illinois. Massachusetts. Missouri. New York. Texas. To find out more about the laws governing payday loans in these states, click here. Federal law, the Fair Debt Collections Practices Act or FDCPA (Fair Debt Collections Practices Act), states that third-party collection companies should stop calling you once they are notified in writing. Many of the FDCPA regulations are extended to the original creditors in several states, like Texas, California, New York and New York. Read the article if you're being harmed or accused of the Collector Agent to find out what steps you can take if a collection representative is in violation of FDCPA. If the payday loan company chooses to transfer the account to a collection company, the debtor can end the phone calls by sending a cease communication demand letter (also called a cease and desist notice) to the collection agency. (See the Bills.com debt self-help center for samples of cease and desist letters.) How Can I Handle Payday Loan Collections? A lot of payday loan companies employ intimidation to scare the borrowers. Even though a person may be in debt does not mean that person loses their rights as a consumer. As mentioned above, payday lenders may ask borrowers to provide their checking account numbers in order to permit automatic withdrawals of borrowers' accounts through the Automated Clearing House. If the account that the borrower is in is not able to pay for the loan and the payday lender is unable to continue to withdraw funds. This could result in overdraft fees for the borrower, and when it happens frequently enough the lender may decide to close the borrower's account. To handle payday loan lenders that take the money from borrowers' accounts, a common method is for them to close the account and then open a new one at the bank. This only works in the event that the bank is able to link the transactions of both accounts into the new one. In this scenario, the bank can simply open the account in the new one to take out the money. This is why it is important to ensure that the bank doesn't allow electronic withdrawals made from an existing account to be transferred automatically into the new account. You can find out more about your rights and obligations as resident of New York resident by visiting the Bills.com New York Collection Laws article. New York Payday Loan New York has several laws that prohibit payday loans. The maximum civil usury amount is 16% in the New York General Obligations Law and SS 5501. According to New York Penal Law SS 190.40 and 190.40 the criminal usury cap is 25% APR. New York law forbids check cashers to cash checks with dates that are deferred. What is the legal standing of payday lending in New York? New York payday lender partners with banks from deregulated states. These lenders offer loans through electronic money transfer. They say that the local storefront is brokering loans for the bank which is exporting interest rates from its home state in the state of New York. New York. This is referred to as rent-a bank lending. The New York City Dept. of Consumer Affairs Tips about Payday Loans provides a detailed explanation of New York law, and gives suggestions on how you can stay clear of payday loans. See also New York State's Prevention of Dangerous or 'Predatory' Loans. More Info on Payday Loans Find out more strategies and tactics for dealing with creditors in Bills.com's article on Debt Negotiation and Settlement Advice. Bills.com offers additional information on its Payday Loan Information pages and has responded to questions from readers regarding payday loans in California, Florida and Illinois. Companies offering payday loans could pursue legal action against you if your loan is not repaid. See the Bills.com Resource Collections Advice for more information about rights for creditors and debtors. The Bills.com Budget Guide and Financial Planning Guide are both free and are able to help manage your financial situation. It also provides information about budgeting and prudent fiscal management.