Payday Loans in New York: What the 16% and 25% Limits Mean for You

Not at payday prices. In New York, a lender without a state license can't charge you more than 16% a year on a personal loan of $25,000 or less, and a state-licensed lender can't go above 25%. A typical payday fee works out to about 391% APR.

New York Loan Costs at the 25% Licensed-Lender Limit

Worked out from New York's 25% limit, not offers from lenders in our network; a lender can charge less.

That 25% binds lenders licensed by New York State. A lender without a New York license is held to 16% on personal loans of $25,000 or less. The Attorney General notes that, because of federal law, these usury rates don't apply to most banks and credit cards, so check the APR on any offer.

Why a $15 Payday Fee Breaks New York's Limits

The Attorney General says many payday loans are illegal in New York and that rates as high as 900% are common. The bigger cost is the rollover: when a loan comes due and you can't repay, many lenders renew it for another fee, so you can pay many times the loan in interest without touching the principal. The Attorney General cites a 2012 industry report that the average borrower took eight loans and was in debt five months of the year.

Paycheck Advance Apps and the 2025 Attorney General Lawsuits

In April 2025, the Attorney General sued MoneyLion and DailyPay, calling their paycheck advances payday loans by another name. The lawsuits allege that fees and tips on advances repaid in seven to ten days amount to triple-digit annual rates that violate New York's usury laws.

• A seven-day $20 advance for $2.99 carries an annual rate of over 750%, by the Attorney General's count.
• A fee of $8.99 on a $100 advance repaid in two weeks works out to about 234% a year.
• Count any fee or tip for instant access as interest when you compare it with a 16% or 25% loan.

Ways to Cover a $500 Gap in New York

The Attorney General points New Yorkers to these lower-cost options before any high-cost loan:

• Ask for a payment plan. Creditors often offer extensions on bills. Ask what fees apply.
• Ask your employer. Some employers offer a paycheck advance that's repaid from future checks.
• Try a credit union or a card. A credit union loan or a credit card cash advance usually costs less than a payday loan.
• Use a licensed lender. New York-licensed lenders may offer unsecured loans that cost less than most payday loans. At 25%, $500 over six months is about $89.51 a month.
• Get budgeting help. A licensed, not-for-profit credit counseling agency can help cut fees and interest and stop harassing collection calls.

Requesting a New York Loan Within the 25% Limit

1. Decide how much you need and how long you need to repay. At 25%, $2,000 over 12 months is about $190.09 a month.
2. Submit one request through LendUp. Lenders in our network review it, and any offer shows the APR, payments and total cost before you sign.
3. Confirm the lender's New York license with the Department of Financial Services (DFS) at (800) 342-3736, and compare the APR with the 25% limit.

Spotting an Illegal Lender Before You Share Your Details

• Upfront fees are a red flag. Advance fees for a loan are illegal, and legitimate lenders never guarantee you a loan before you apply.
• Broker fees are capped. State law limits a loan broker's total fee, charged after approval, to 0.5% of a non-mortgage loan.
• Guard your numbers. Online lenders often ask for your Social Security and bank account numbers. Share them only with a company you can identify.
• Check the license. DFS licenses New York lenders and can tell you whether a company holds a license: (800) 342-3736.

Report an illegal payday lender or a loan scam to the Attorney General's Consumer Frauds Bureau at (800) 771-7755, or file a complaint online.

Common Questions

Official Sources

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