Consumers in debt may be enticed by offers of a payday loan. A payday loan is a short term loan with very high interest rates sometimes reaching 400% or more. Typically, the loan is repaid, together with interest, directly from the borrower's checking account after his/her next payday. If the loan cannot be paid back at the end of the term, the loan will be renewed, and the consumer will be charged more fees and interest on top of the money that he/she already owes.
While payday loans are not legal in New York State, they are still marketed to New York consumers over the Internet. Read the New York State Department of State Division of Consumer Protection's Payday Loan Fact Sheet for more information and for alternatives to payday borrowing.