How long you have to collect a personal loan in New York.

NY CPLR § 213(2) · GEN. OBLIG. LAW § 17-101

The rule: six years for breach of contract.

CPLR § 213(2) sets a six-year limitations period for actions on a contractual obligation. A personal loan, whether written, texted, or spoken, is a contractual obligation, so a lawsuit to collect it must generally be started within six years of the breach. File on day one of year seven and the borrower can have the case dismissed regardless of how good your evidence is.

The period is about starting a lawsuit, not finishing one. Sending a demand letter does not stop the clock. Only filing does. That distinction matters if you are close to the deadline.

When the clock starts: loans with a due date.

If the loan had an agreed repayment date, the breach occurs when that date passes without payment, and the six years run from there. A loan due on March 1, 2021 that was not repaid can be sued on until roughly March 1, 2027.

Installment loans work per installment. If your cousin agreed to pay $500 a month for ten months and stopped after three, each missed installment has its own six-year clock. That means the earliest missed payments can expire while later ones are still live. If the agreement included an acceleration clause (“if you miss a payment, the whole balance is due”), the analysis changes and the entire balance may have come due at the first default. Informal loans rarely have such clauses, but it is worth checking your messages.

When the clock starts: loans with no due date.

This is where most personal loans live, and where people get it wrong in both directions. Lenders assume the clock has not started because they never set a deadline. Borrowers assume the clock started the day the money was handed over. Neither is reliably correct.

The general approach in New York is that a loan payable on demand, or with no stated time for repayment, is treated as due within a reasonable time or upon demand, and the limitations analysis can turn on when the lender was first entitled to demand repayment. For many demand loans, that may be very soon after the money was advanced, which means the clock may have been running longer than you think. This is a technical area with case-specific answers, and if your loan is more than a few years old with no due date, you should get advice on your specific facts rather than rely on a general rule. Do not let an open-ended loan sit on the assumption that you have all the time in the world.

What restarts the clock: written acknowledgment.

New York's General Obligations Law § 17-101 provides that a written acknowledgment or promise to pay, signed by the party to be charged, is sufficient evidence of a new or continuing contract to take the case out of the statute of limitations. In plain terms: if the borrower signs a writing acknowledging the debt, the six-year period starts over from that acknowledgment.

What counts as a signed writing in the age of texting is a question courts have wrestled with, and you should not assume every text message qualifies. A clear email or message in which the borrower unambiguously acknowledges the existing debt and does not indicate an intent to refuse payment is the kind of communication the statute was aimed at, and the more formal and unequivocal it is, the stronger the argument. A borrower who writes “I know I owe you $4,000 and I will pay it, I just need time” has said something that may revive the claim; one who writes “I don't think I owe you anything” has not. Save every such message with its date visible.

What restarts the clock: partial payment.

Under long-standing New York case law, a partial payment on a debt can also restart the limitations period, provided the payment was made under circumstances showing the borrower recognized the full debt and intended to pay the rest. A $100 Venmo payment captioned “toward what I owe you” on an otherwise stale loan may reset the clock; a $100 payment captioned “for dinner last week” does not. This is why the memo lines on payment apps matter beyond proving the original loan; see using Venmo and Zelle records.

Two cautions. First, the partial-payment rule depends on the circumstances of the payment, not just the fact of it, so keep the surrounding messages. Second, do not try to manufacture a revival by persuading a borrower to send a token payment without understanding what it means; the circumstances will be scrutinized, and candor with the borrower is both the ethical and the effective approach.

Practical timeline for a lender.

• Years 0 to 1: Ask in writing. Propose a plan. Save the response. If the borrower acknowledges the debt, you have created evidence that helps on both liability and the clock.
• Years 1 to 4: This is the window for a demand letter and, if necessary, a filing. Evidence is fresh, the borrower's circumstances are known, and the clock is not a concern.
• Years 4 to 6: Move. A demand letter can still resolve it, but set your own deadline for filing well before the six-year mark, and remember that only a filing stops the clock.
• Past year 6: Unless a qualifying acknowledgment or partial payment occurred within the last six years, the claim is likely time-barred. A polite request can still work on a borrower who wants to pay, but a lawsuit will not.

For the proof side, which is the other half of every loan case, see oral loan agreements in New York.

What a demand letter does here.

On the limitations issue specifically, an attorney demand letter does something valuable: it invites a response, and responses tend to contain acknowledgments. A borrower who replies to a law firm with “I agreed to pay this back by June, and I still intend to, but I need until fall” has arguably done the lender a favor under General Obligations Law § 17-101. Even a reply that disputes the amount will often concede the loan. Our letters state the loan, the evidence, and the deadline, and propose a written payment plan, which, once signed, is itself a fresh written acknowledgment with a new due date. See how the flat-fee process works.

The letter does not, however, stop the clock. If you are within a few months of the six-year mark, tell us, and we will tell you whether a letter makes sense or whether you should go straight to filing. Our small claims court guide explains how to start a case quickly, and demand letter vs. small claims lays out the tradeoff.

Family loans tend to be the ones that age the longest, because nobody wants to raise them; read lending money to a family member if that is your situation. And for the full overview of personal loan collection in New York, start at lent money and not paid back.