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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.
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.
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.
Check the websites of any providers you’re interested in to confirm they operate in your state.
Although Colorado has laws in place to protect consumers from predatory lending, you’ll still have to pay some fees when you borrow.
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.
If you’re interested in applying for a short-term loan in Colorado, you’ll need to meet the following eligbility criteria:
To complete your application successfully, prepare to submit some basic information:
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.
You won’t be able to apply for a new loan unless you’re a returning customer.
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If your hospital already borrowed, consider these alternatives before payments are due.
Debt settlement for payday loans and more — with almost no information available before you sign up.
While the SBA is now processing PPP loan forgiveness applications, many lenders have yet to start working through their backlog.
The Balance Assist loan, set to launch in January 2021, offers loans from $100 to $500 for a flat $5 fee.
Bank of America is offering loans from $100 to $500 for a $5 flat fee and 90 days to repay starting in January 2021.
Get near-instant access to LendFi loan funds, plus earn 4% cashback on all purchases with the LendFi Visa Card.
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