A Guide to Payday Loans and the Law in Colorado

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The Law in Colorado

ColoradoCash advances (payday loans) from both store front and online lenders are legal in the state of Colorado according to the laws contained in Article 3.1 (Deferred Deposit Loan Act) of Title 5 (Consumer Credit Code) in the Colorado Revised Statutes (Colo. Rev. Stat. 5-3.1-101 et seq.).


Options for residents

Consumers wishing to apply for cash advances from storefront lenders within the state of Colorado can visit the online business directory Yell.com. Alternatively, a simple search via Google will help them to find a suitable company. For those looking for more immediate solutions, the introduction and application platform here at CashAdvanceOnline.net can help consumers to find reputable online lenders operating in accordance with all relevant state and federal laws.

The Lending Rules

The following lending rules must be compiled with for Colorado payday loans:

  • Maximum loan amount: $500
  • Minimum length of loan: 6 months
  • Maximum length of loan: No maximum
  • Maximum finance charge on a $300 payday loan: 20%
  • Maximum finance charge on a payday loan between $300 and $500: An extra $7.50 per extra $100 loaned.

The Debt Limits

In order to limit the amount of outstanding loans a consumer can have, the following debt limits must be adhered to in Colorado for cash advances:

  • Maximum loan amount: A total of $500 can be borrowed by each single individual, in any number of loans provided their total does not exceed $500.
  • Rules on renewals: There is 45% interest rate for renewals and the number of loans is not limited if their total is less than $500.
  • Maximum maintenance fee for outstanding loan: A monthly fee of $7.50 per $100 loaned up to a maximum of $30.
  • Repayment plan availability: Yes
  • Prohibition on splitting loan into two parts: Yes

The Collection Restrictions

In addition, there are certain additional collection restrictions in operation that restrict the actions of lenders and collection agents:

  • Maximum collection fees: Lenders can collect a maximum of $25 “non-sufficient funds” (NSF) fee. If the loan is not repaid, the amount of the loan plus attorney fees can be recovered through a court trial.
  • Limit to actions of collection agency: In Colorado, a collection agency is not permitted to take any legal action against a borrower unless the borrower has closed their checking account before the repayment was completed.
  • Rules on early repayment: If the loan is repaid before the end of the loan term, the lender must refund to the consumer a prorated portion of the annual percentage rate.

Regulatory information

In the instance that either a store front or online lenders offers a payday loan to an Colorado resident in contravention of the above rules and parameters, consumers are advised to contact the Attorney General of Colorado:

  • Name of Regulator: John W. Suthers, Attorney General of Colorado
  • Address: Ralph L. Carr Colorado Judicial Center, 1300 Broadway, 10th Floor
    Denver, Colorado 80203.
  • Phone: 720-508-6000 or Consumer Line: 800-222-4444
  • Fax: 720-508-6030
  • Email: Attorney.General@state.co.us
  • Link to complaint form: File a consumer complaint here
  • Website: www.coloradoattorneygeneral.gov

Be safe

Know your rights – make sure that you only accept a payday loan from a lender that acts in strict accordance with the laws of the state in which you reside.

Cash advances can be a real lifesaver when you need extra cash to make the month. Be sure to select a trustworthy lender. You can start your search the right way by filling in our lender introduction form and letting us do the hard work for you.

Click here to get started!

 

 

 

 

 

 

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