Compare your loan options in Colorado

If you’re facing a financial emergency, you may be considering a payday loan. Colorado law regulates payday, or short-term, loans heavily. Our guide will detail the costs of borrowing and what laws your lender must abide by.

Can I get a payday loan in Colorado?

Yes. Short-term loans are legal in Colorado. The Deferred Deposit Loan Act under the Colorado Revised Statutes 5-3.1-101 et seq. governs the functioning of all short-term lenders in the state.

The amount you borrow in payday loans through any one lender cannot exceed $500. The minimum loan term is six months, and there is no set maximum. You have the right to rescind (cancel) a payday loan before 5 p.m. the next business day after the loan transaction takes place.

Five quick facts about payday loans in Colorado

• Maximum loan amount: $500
• Minimum loan term: 6 months
• Maximum loan term: None
• Maximum APR: 45%
• Rollovers: You are permitted 1 rollover.

There is no limit on the number of loans borrowed as long as the combined total doesn’t exceed $500. If you pay off your loan early, your lender must refund you a pro-rated amount of interest based on the remaining term of your loan.

What fees will I have to pay?

Although Colorado has laws in place to protect consumers from predatory lending, you’ll still have to pay some fees when you borrow.

• Finance charges: A lender can’t charge more than 20% for the first $300 borrowed. They may charge an additional 7.5% per $100 for any amount over $300.
• Maintenance fees: The maintenance fee can’t exceed more than $7.50 per $100 loaned, up to a maximum of $30 per month the loan is outstanding.
• Non-sufficient funds (NSF) fees: Lenders can charge $25.
• Collection fees: If you fail to repay your loan, a lender can charge you the full amount of the loan and attorney fees if the default is brought to court.

What should I keep in mind before applying?

If you’re struggling to make it between paychecks, a short-term loan could help you through your financial troubles. Colorado law heavily regulates lenders, and unlike other states, the minimum term for a loan is six months. This means a payday loan functions more like an installment loan.

However, keep in mind that these are still expensive solutions to a temporary problem. Colorado does have a few assistance programs that can help you, like the Low Income Energy and Heating Assistance (LEAP), which can lower the cost of your energy bill. Government assistance programs are just one alternative to costly payday loans.

How can I apply for short-term loan?

If you’re interested in applying for a short-term loan in Colorado, you’ll need to meet the following eligbility criteria:

• Be at least 18 years old
• Be a US citizen or a permanent resident
• Have a regular source of income

To complete your application successfully, prepare to submit some basic information:

• Personal details, such as your name, date of birth, Social Security number and a valid form of ID
• Contact details, such as your residential address, email address and phone number
• Details about your employment and income

Bottom line

If you’re considering taking out a payday loan, familiarize yourself with the laws of Colorado to make sure you’re getting the best terms for your loan. As with all forms of credit, be prepared to pay for both the principal and accumulated interest.

Have any more questions about Colorado short-term loans?

• What is the maximum number of outstanding payday loans I can have in Colorado?

  There is no maximum limit, provided your debt does not exceed $500 and there is a gap of 30 days between loans.

• Do payday loan laws in Colorado permit rollovers?

  Yes, you can get one renewal with an APR of 45%.

• Is there a limit to collection fees with payday loans in Colorado?

  Your lender can charge one NSF fee. You may also have to pay reasonable attorney fees.