Yes, payday loans are legal in the state of Colorado as of 2022. But, there are restrictions in place that dictate the interest rates Colorado payday lenders are legally allowed to charge their borrowers.
While many places do payday loans in Colorado, they are limited in what kind of APR they are allowed to charge borrowers. The maximum APR that lenders are allowed to set on a payday loan in Colorado is 36%. These interest rate restrictions are meant to help protect Colorado borrowers from predatory payday lending tactics.
Interest rates play a huge role in determining how long it will take for a borrower to pay off their loan and how much a borrower will ultimately pay at the end of their loan terms. When payday loan interest rates get out of control, borrowers can take months or more to get rid of their balance. During that time, borrowers may find they have paid hundreds of dollars more than their original funding amount!
Despite interest rate regulations in Colorado, payday loans can still be a risky funding option. For example, the turnaround time on payday loans is extremely short, about two weeks or less. This brief repayment period can make payday loans quite stressful to deal with. Furthermore, borrowers who don’t pay off their loans within that quick loan term risk accumulating interest and fees that can make their balance even more challenging to pay off. Colorado residents are typically better off going with another loan product. More convenient loan products Colorado residents have access to are installment loans or bad credit personal loans. Many personal loan lenders in Colorado are willing to work with each borrower to determine rates, terms, and monthly payments that fit their individual budgeting needs. There are even lenders that offer an easy online application and approval process, so you don’t even have to leave your home to get connected to the money you need.