There are new regulations on short term money loans in Colorado that will go into effect very soon. In August of this year, Colorado payday advance direct lenders may have the interest rates and repayment terms of their products capped. The bill is stronger than some within the industry had hoped for and weaker than many legislators were pushing for.
Lower interest rates
The interest rates of personal debt loans in Colorado will now be limited to 45 percent annual interest. Though interest rates are calculated annually, the terms of the loan are really much, much shorter. The current cap on these loans in Colorado is 300 percent annual interest. A couple of legislators were pushing for a 36 percent cap.
Keeping the repayment terms longer
Short term installment loans in Colorado presently have terms between seven and thirty days. As of August, this term could be stretched out. Lenders can be legally required to offer a term no shorter than six months on the loans. Borrowers may also be required to have the flexibility of repaying the loan earlier than the six month term.
Monthly and origination fees
The newest bill in Colorado allows fees for both carrying the loan and originating the loan. The lender could be able to charge $ 75 to originate the loan.
The payday advance debate in Colorado
There has been a heavy debate over instant cash loan in Colorado. Some legislators want to pass perhaps stronger regulations on the cash advance industry. The current bill, though, passed with a very slim one-vote majority. No matter what, paydayloans will continue to be a controversial issue for most state legislators.
