Payday Loans are NOT Legal in New Mexico

Beware of predatory lending

Payday Lenders in New Mexico

Payday loans, often touted as short-term financial solutions, are prohibited in the state of New Mexico due to strict regulations outlined in the New Mexico Small Loan Act. These loans, characterized by high interest rates and fees, prey on vulnerable individuals in need of quick cash.

Recognizing the predatory nature of payday lending, the state has implemented measures to protect its residents from issues associated with these loans. In fact, the average annual percentage rate (APR) for payday loans in the state was a staggering 347%. As a result, the New Mexico legislature enacted laws to ban payday loans and protect consumers from these exploitative practices.

Residents of New Mexico must exercise caution, particularly when dealing with online lenders, as they are a prime target for scams. Online payday loan scams often involve fraudulent lenders who operate through websites and prey on individuals seeking quick financial assistance. Online payday loan scams accounted for nearly a quarter of all reported scams in 2020, with an estimated loss of $14 million. These scams typically involve deceptive practices, such as charging excessive fees, unauthorized withdrawals, or false loan approvals. It is crucial for residents to remain vigilant, verify the legitimacy of lenders, and never provide personal or financial information to untrusted sources.

Payday Loan Laws

Under the New Mexico Small Loan Act, payday loans are strictly prohibited in the state of New Mexico. Enacted in 2017, the law explicitly defines payday loans as illegal and establishes regulations to protect consumers from predatory lending practices. Section 58-15-32 of the New Mexico Statutes Annotated states that loans under $5000 must be spread over at least 4 payments in no less than 120 days. The law also imposes strict penalties on lenders who violate these regulations, including monetary fines and potential license revocation.

Loan Terms and Conditions

prohibited

Whenever you need emergency financing, you can get loans online from a legit lending companies. Check your rates and terms before applying for cash advance online.

History of New Mexico Payday Loans

The history of payday loans in West Virginia has witnessed a series of regulatory changes and interventions. In 1916, the introduction of the Uniform Small Loan Laws across many states aimed to cap the interest rates on small loans. However, New Mexico took a different approach in 1939 by implementing its own legislation, which imposed a 12% APR cap on unsecured loans. In the late 1970s, the Supreme Court decision to repeal interest rate caps opened the door for the expansion of the payday lending industry, and New Mexico followed suit in the 1980s and 1990s. Subsequently, New Mexico enacted the Payday Loan Reform Law in 2007, which introduced certain regulations and a loan database. Despite these efforts, loopholes remained, prompting the state to pass HB 347 in 2017, implementing the first statutory rate cap of 175% APR on small loans under $5,000. While some argue for more stringent regulations, these measures serve as a significant step in safeguarding consumers in West Virginia from exploitative payday lending practices.

State Resources

How to file a complaint

Borrowers can file a complaint against a lender with the Financial Institutions Division of the Regulation and Licensing Department. Consumers must download the complaint for and send it to the identified industry manager listed on their website once it is complete.

New Mexico Loan Debt Relief

How to Get out of Loan Debt?

Escaping loan debt in New Mexico requires a strategic approach and careful financial planning. First, assess your current financial situation by analyzing your income, expenses, and outstanding debts. Create a realistic budget that prioritizes debt repayment and reduces unnecessary spending. Consider negotiating with lenders for modified repayment terms, such as extended payment plans or lower interest rates. Additionally, explore debt consolidation options to combine multiple debts into a single manageable payment. Seek assistance from credit counseling agencies or financial advisors who can provide expert guidance on debt management strategies. Implementing responsible spending habits, building an emergency fund, and avoiding further debt accumulation are crucial steps towards achieving financial freedom. With determination and disciplined financial practices, it is possible to overcome loan debt and regain control of your financial well-being in New Mexico.

Support Resources

Types of Quick Loans in New Mexico

Payday Alternative Loans Payday Alternative Loans (PALs) in New Mexico offer a lifeline to individuals in need of financial support, serving as a responsible alternative to traditional payday loans. PALs, available through select credit unions, provide borrowers with small, short-term loans that come with more favorable terms and lower interest rates. These loans are designed to protect borrowers from the predatory practices commonly associated with payday lending, offering greater flexibility and financial stability.

Installment Loans For those in New Mexico looking for financial solutions, installment loans provide a flexible approach to repayments, tailored to individual creditworthiness. Whether it's consolidating debts, addressing home repairs, or managing unexpected expenses, installment loans in New Mexico offer competitive interest rates and extended repayment terms. These loans empower borrowers with the financial freedom and control they need to overcome financial challenges, providing a manageable path towards achieving their financial goals.

Title Loans Title loans are a way that borrowers can use their car as collateral and receive cash, usually the amount is based on a percentage of the value. New Mexico limits the maximum loan limit to $2500 under the Pawnbroker Law and the loan must be paid back in a single installment. Otherwise, the lender can seize and sell the vehicle to recover any remaining balance. The interest rates on title loans can be up to 300%. Losing the car can be a serious financial risk.

Alternatives to Payday Loans in New Mexico

Personal Loans

New Mexico residents have access to personal loans, offering unsecured borrowing options without the need for collateral. The terms and rates of personal loans vary among lenders, considering factors such as credit history and income. While some lenders may have specific credit score requirements or minimum income thresholds, others offer more flexibility.

Construction Loans

New Mexico offers various construction loan options tailored to support the construction of new homes or the renovation of existing properties. Lenders in New Mexico consider factors such as the borrower's creditworthiness, construction plans, and projected timeline to determine loan eligibility and terms. These loans provide the flexibility to draw funds as needed during the construction process, empowering New Mexico residents to bring their visions to life. With different interest rates and repayment options available, construction loans in New Mexico present an opportunity for borrowers to embark on their construction projects with confidence.

Home Equity Loans

Home equity loans are a popular choice among New Mexico homeowners seeking funds for home improvements or other expenses, such as education costs. They tend to have fixed interest rates and can range anywhere from five to thirty years, depending on the borrower's credit history and the amount of equity built in their home. Usually, a home equity loan places the borrower's property at risk, as lenders have the option to initiate foreclosure proceedings in case of loan default. New Mexico residents considering home equity loans should carefully evaluate their financial circumstances and consult with lenders to make informed decisions.

Bad Credit Loans in New Mexico

New Mexico residents with low credit scores can explore bad credit loan options in New Mexico to obtain funding when traditional loan avenues may not be accessible. These loans serve as a means for individuals to rebuild their credit and regain financial stability. However, it is important to note that bad credit loans typically come with higher interest rates compared to traditional loans. New Mexico borrowers should carefully review the terms and rates offered by different lenders, ensuring they can comfortably manage loan payments. Making timely loan payments is crucial for credit score improvement.

New Mexico Small Business Loans

Small business loan options in New Mexico:

SBA loans: The SBA offers a variety of loan programs, including 7(a) loans, 504 loans, and microloans, to help small businesses access funding for things like, such as working capital, equipment purchases, and real estate investments.

New Mexico Economic Development Department (EDD) Loans: EDD offers loans and loan guarantee programs to stimulate economic growth and job creation in the state, supporting small businesses with financing needs.

New Mexico Small Business Investment Corporation (NMSBIC) Loans: NMSBIC provides financing options to small businesses in New Mexico, offering loans for business expansion, equipment purchase, working capital, and more.

Business Lines of Credit: Offer a revolving credit facility, allowing businesses to access funds as needed. They provide flexibility and can be used for short-term working capital, inventory management, or other operational expenses.

Credit Union Loans: Credit unions in New Mexico offer small business loans with competitive rates and flexible terms. They may have membership requirements, but they often provide personalized service.

VA loans in New Mexico

Eligible military members, veterans, and their surviving spouses in New Mexico can take advantage of VA loans, providing a range of benefits backed by the Department of Veterans Affairs. With no down payment requirements, lower interest rates, and no private mortgage insurance (PMI), VA loans offer an appealing mortgage option for homeownership. New Mexico residents meeting specific eligibility criteria, such as serving a minimum active duty term or being the surviving spouse of a deceased veteran, can utilize VA loans for purposes like home purchase, refinancing, or home improvements. VA loans in New Mexico adhere to a maximum loan limit set by the Department of Veterans Affairs. This limit ensures affordable and accessible financing options for military personnel and veterans pursuing their homeownership goals in New Mexico.

New Mexico Student Loans

Many options are available to New Mexico students to help finance their college education. These options include:

Federal Student Loans: Students in New Mexico can apply for federal student loans by completing the Free Application for Federal Student Aid (FAFSA). These loans include Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. Federal student loans offer competitive interest rates and flexible repayment options.
New Mexico Student Incentive Loan Program (NM-SILP): This program offers low-interest loans to New Mexico residents attending eligible colleges and universities in the state. The loans are need-based and can help cover tuition, fees, and other educational expenses.
New Mexico Student Loans for In-State Schools: This program provides low-interest loans to New Mexico residents attending eligible in-state schools. The loans are designed to supplement other forms of financial aid and help fill the gap between the cost of attendance and other available funds.
Private Student Loans: Loans offered by private lenders that can be used to pay for education expenses, with interest rates and terms that can vary widely.

New Mexico Income Information

The recently released 2021 U.S. Census reports show New Mexico having a median household income of $54,020, significantly lower than the national median of $69,021. New Mexico’s economy is characterized by a diverse mix of industries, including oil and gas, agriculture, manufacturing, tourism, and technology, contributing to its overall economic resilience and stability. With a rich cultural heritage, scenic landscapes, and a growing film industry, the state attracts visitors from around the world, driving revenue and employment opportunities in sectors such as hospitality and entertainment. New Mexico’s median household income varies widely by county, with Los Alamos County being the highest at $119,266, 132% above the state average, and Mora County being the lowest at $29,458, 42% below the state average. The state’s poverty rate was 18.4% in 2021.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on May 12, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: New Mexico. Accessed on May 12, 2023.

New Mexico Payday Lender Complaints

Below are trends associated with some payday lenders in New Mexico, as reported to the Consumer Financial Protection Bureau.

Company Name	Count
ENOVA INTERNATIONAL, INC.	9
CURO Intermediate Holdings	7
CNG FINANCIAL CORPORATION	6
Populus Financial Group, Inc. (F/K/A Ace Cash Express)	5
ZARVAD III S.A.	20
Delbert Services	4
Total Complaints	84

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on May 12, 2023.

Most Common Issues

Complaint type	Count
Charged Unexpected fees or interest	23
Can’t contact lender	19
Received a loan didn’t apply for	10
Struggling to pay loan	8
Payment not credited to account	4

What are the main reasons Americans apply for payday cash advance online or offline

Payday loans are typically used for nonnegotiable everyday expenses like your rent, utilities, and groceries. Per data reported by Pewtrust, the percentage of reasons described below

Reason	Share
Regular Expenses (Utilities, car payment)	53%
Unexpected emergency/expense	16%
Rent/Mortgage	10%
Something Special	8%
Other	5%
Did not answer	2%

Payday Lenders by City

Albuquerque
Las Cruces
Rio Rancho
Santa Fe
Roswell
Farmington
Hobbs
Clovis
South Valley
Carlsbad

Alamogordo
Gallup
Los Lunas
Sunland Park
Deming
Chaparral
Los Alamos
Las Vegas
Artesia
North Valley

Portales
Lovington
Española
Silver City
Grants
Bernalillo
Anthony
Socorro
Corrales
Shiprock

Frequently Asked Questions

Are online payday loans legal in New Mexico?

No, online payday loans are not legal in New Mexico. The state law prohibits payday lending both online and in physical storefronts.

Can I get a payday loan from a tribal lender in New Mexico?

Tribal lenders operating in New Mexico are subject to the state law, which prohibits payday lending. Therefore, you cannot obtain a payday loan from a tribal lender in the state.

Are there any exceptions to the payday loan ban in New Mexico?

No, there are no exceptions to the payday loan ban in New Mexico. The state law prohibits payday lending in all forms.

Can I take out a payday loan from a neighboring state if I live in New Mexico?

While neighboring states may have different regulations, it is important to note that taking out a payday loan from a neighboring state does not exempt you from the laws of New Mexico. If payday lending is illegal in New Mexico, it remains illegal for residents, regardless of where the loan is obtained.

What are the consequences for payday lenders operating illegally in New Mexico?

Payday lenders operating illegally in New Mexico may face legal consequences, including fines, penalties, and potential legal actions. The state authorities actively enforce the payday loan ban to protect consumers from predatory lending practices.

What should I do if I have been a victim of a payday loan scam in New Mexico?

If you have been a victim of a payday loan scam in New Mexico, it is important to report the incident to the New Mexico Regulation and Licensing Department. Additionally, you may want to contact local law enforcement and seek legal advice to explore your options for recourse.