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 also have to be offered the ability to repay the loan early.
Monthly and origination fees
The borrowers who offer these loans in Colorado can be allowed to charge fees for originating and carrying the loan. Borrowers could be charged $ 75 to originate the loan and up to $ 30 each month to carry the loan.
Debating Colorado’s payday loans
On the Senate floor and within the Governor’s office, the debate over payday cash loans has been heavy. Some legislators call for cash advance industry companies to be banned. The current bill, though, passed with a very slim one-vote majority. Most state legislatures will probably end up reconsidering this controversial issue time and time again.
