Are Payday Loans illegal in NY? Date: Mon, 12:53. Hi guys! I am new to these forums and have to say, they are wonderful!! I am currently in Payday loan hell. Have about 5 loans, and am working on trying to pay them off, even though some of them have collected way more from me than they should have. After doing research on internet payday loan laws in the state of New York, I have found that your internet payday loans are actually illegal. I have also found the following laws to be true applying to payday loans in the state of New York in general: New York State Information Albany, NY Payday lending is already illegal in New York State, as it is in more than a dozen other states in the US. But that hasn’t stopped a myriad of Internet payday lenders from attempting to. A payday loan (also called a payday advance, salary loan, payroll loan, small dollar loan, short term, or cash advance loan) is a small, short-term unsecured loan, regardless of whether repayment of loans is linked to a borrower's payday. The loans are also sometimes referred to as cash advances, though that term can also refer to cash provided against a prearranged line of credit such as. No, payday loans are not legal in the state of New York. The only way a resident of New York can receive a payday loan is via the Internet or an out of state call center. New York Sues To Stop Illegal Payday Lending Scheme Attorney General Spitzer today sued a Delaware-based bank and two out-of-state financial companies for operating a payday loan scam that saddles middle to low income New Yorkers with huge debt. NYC Personal Loans is ready to provide you with any funding you may be in need of. With all credit scores considered, apply today to get started.