There are new regulations on short term money loans in Colorado that will go into effect very soon. New caps could be put on cash advance direct lenders in Colorado. The bill is stronger than some within the industry had hoped for and weaker than many legislators were pushing for.
Keeping the interest rates limited
Personal debt loans in Colorado are going to be limited to 45 percent annual interest rates. Though interest rates are calculated annually, the terms of the loan are actually much, much shorter. The current loan limits in Colorado are set at 300 percent annual interest. A couple of legislators were pushing for a 36 percent cap.
The longer terms required on loans
Currently, the short term loans offered in Colorado can have terms as short as two weeks. When the new legislation goes into effect in August, that term can be extended. There will be a minimum term of six months or longer on all these loans. Borrowers will even need to be offered the ability to repay the loan early.
Carrying and originating the loan
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
On the Senate floor and in the Governor’s office, the debate over instant cash loans has been heavy. Some legislators call for cash advance industry businesses to be banned. Just one vote made the difference in passing the Colorado bill. No matter what, payday loans will continue to be a controversial issue for most state legislators.
