Colorado Payday Loan Laws

Colorado has more than 22,000 pay day lending companies in the state. This is why they had to enact specific laws pertaining to these types of loans as listed below.

• Maximum Payday Loan Amount – $500 dollars
• Minimum Payday Loan Terms – Six Months
• Maximum Quantity of Outstanding Payday Loans – Unlimited, cannot exceed $500 dollar total
• Maximum Amount of Payday Loan Extensions – Unspecified, Maximum renewal interest is 45 percent
• Maximum Payday Annual Percentage Rate (APR) – N/A
• Maximum Payday Financing Interest Fees – Under $300 dollars is 20 percent and under $500 to $301 is 7.5 percent
• Maximum Payday Annual Financing Interest Rates – 45 percent monthly
• Maximum Allotted NSF Check Fees – $25 dollars and the court costs
• Maximum Allowed Criminal Actions – None

There are a few other provisions Colorado lawmakers put into place to protect their citizens. For instance, all the loan paperwork must be visibly readable for most customers and in a ten point font. All the APR, fees loan amounts, and interest charges must be easy to fine and read. In addition, the borrower has the right to back out of the payday loan agreement within 24 hours without obligation or consequences from the lender. Also, a payday company may not break up a loan into several smaller loans in order to collect double or triple the fees and interests.

There are always some bad seeds in most any industry, payday lending included. The very nature of this type of lending boarders on abusive lending practices. The lenders are preying on the needs of the downtrodden in order to charge triple digit APR. However, there are still deceptive payday loan companies that go a step further and have found out how to bypass these laws.

One common loophole dishonorable payday loan companies use often it to have their family members pose as owners of other payday lending companies. Then, will only approve half the amount the client needs and suggests a location, “they know will approve them.” The customer has no idea the helpful person behind the counter has just taken advantage of them by sending them to a location he or she basically owns. Now they will have to pay double the fees and interest.

Although Colorado has the payday laws in place, it can be difficult to keep a check on all of them at once. This is why so many can get away with using these loopholes, for a time anyway. Consumers should always be aware of what their payday loan says and who they are borrowing from to keep themselves protected.

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