You will find new regulations on short term money loans in Colorado that will go into effect very soon. In August of this year, Colorado payday loan direct lenders can have the interest rates and repayment terms of their products capped. The bill is very centrist, weaker than some legislators had hoped for but stronger than industry lobbyists had pulled for.
Keeping the interest rates limited
The interest rates of personal debt loans in Colorado will now be limited to 45 percent annual interest. The term of loans are often much less than a full year, but interest rates are calculated annually. The current loan limits in Colorado are set at 300 percent annual interest. Some lenders said that a 36 percent rate cap was good, but lenders argued that high administration costs and default rates make that rate practically extremely hard to operate under.
Extending the term of the loans
The term on short term installment loans in Colorado is generally set at two weeks or less. When the new legislation goes into effect in August, that term will be extended. There will be a minimum term of six months or longer on all these loans. The lenders are also required to offer the ability to repay the loan in less than six months.
Fees for carrying and originating the loan
The borrowers who offer these loans in Colorado can be allowed to charge fees for originating and carrying the loan. The lender will be able to charge $ 75 to originate the loan.
The payday loan debate in Colorado
On the Senate floor and in the Governor’s office, the debate over instant money loans has been heavy. Some legislators call for payday advance industry businesses to be banned. Just one vote made the main difference in passing the Colorado bill. In the end, payday loans continue to be a controversial issue, and also the state legislature is sure to revisit the issue again.
Martin Rogen 
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