Colorado Payday Loan Law
When you are out of cash and there are bills you need to take care of, there are not many things that you can do. Of course, sitting around and waiting will not help not would be of any help. The faster you react, the better and therefore the longer you wait, the worse it is going to get.
And such difficult and tricky financial situations are not something rare in today’s economy. There are many people who can barely afford to pay their monthly bills even though they are working hard and have a steady source of monthly income.
It is just that life can be too expensive. What if, on top of all your monthly bills, you suddenly have to deal with an unexpected emergency? This is why, nowadays, so many people are using the services of the loan lending industry. When there is no one that you can turn to, you may find an answer to your financial trouble in a certain type of loan. Today, there are numerous loan types that borrowers can choose from, however, one type of short-term loans definitely stands out and that is payday loan.
Payday loans have gained incredible popularity in recent years and that is mostly because they offer borrowers what most standard loans from traditional loan lending institutions do not offer. Payday loans are attracting borrowers all across the country and the state of Colorado is no exception. Below, we are going to answer whether payday loans in Colorado are legal, their terms, features they offer and how to apply for one.
What is a payday loan?
A payday loan is a small-sum, short-term loan which the borrower takes out a certain amount of money which he then must repay in full by his next paycheck. A standard payday loan is usually not more than $500 and is for a period no longer than two weeks. Payday loans have very high interest rates and fees which makes them quite dangerous for borrowers that are not so well prepared to repay their loans on time.
This is why payday loans should only be used as a last resort option to help deal with an emergency situation or some really important bills.
Payday loans are an extremely fast service – from the loan application process, approval response time to the money transferring. The application process for a payday loan takes no more than a couple of minutes, after which you get very fast response on your application. If you are approved for your loan, you will receive your money as soon as within a few hours or by the end of the following working day.
Many payday loan lending companies give out loans to borrowers with bad credit scores and this is one of the main reasons why payday loans are so popular. Another reason for their popularity is the fact that you can get a payday loan without having to leave your home. You can apply by simply going online and submitting your application to a lender’s web site.
Colorado Payday Loan Laws
According to Colorado payday loan laws, payday loan lending is legal and is regulated by Colorado Deferred Deposit Loan Act, which directly governs the operation of all payday loan lending companies in the state of Colorado. In Colorado, borrowers are not allowed to take out more than one payday loan at once.
The maximum loan amount a borrower can take must not exceed $500, with a minimum payday loan length of six months. Payday loan lending companies cannot charge more than 20% for any payday loan not exceeding $300. If the loan amount is more than $300, an extra fee of $7.50 is added for every $100 as a finance charge.
The interest rate for renewals is 45%, with no limit on the number of loans, as long as their total amount does not exceed $500. According to Colorado payday loan laws, payday loan lenders are allowed to charge a single NFS collection fee which must not exceed $25. In the case of a default on a payday loan, the loan amount plus all fees, including an attorney fee, can be requested through a court trial. Collection agencies are forbidden from taking criminal action against borrowers, unless the borrower checking account has been closed before the repayment has being made.
In Colorado, it is not allowed for borrowers or their payday loan lenders to split the payday loan into two parts. This is because this practice allows payday loan lenders to get profit by charging interest and fees on both parts of the loan, resulting in a larger sum for the borrower to pay.
Eligibility criteria for payday loans in Colorado
To be eligible for a payday loan in Colorado, you need to meet certain eligibility requirements. You have to be 18 years old, have a steady job and a stable source of income. You have to be a resident of the United States and have an active account. For the completion of the loan application process, you will have to provide some basic information such as your birth name, your address and a valid form of ID.
Cities in Colorado where you can find a legal payday loan lending company
- Colorado Springs
- Commerce City
- Glenwood Springs
- Grand Junction
- Highlands Ranch
- Glenwood Springs
- Wheat Ridge
- Fort Collins
- Fort Morgan
- Canon City
- Estes Park