Payday Loans and Cash Advance in Colorado

Capped at 36% APR since February 2019. Below: the law, the limits, what $300 costs here, who regulates it, and how to request a cash advance online in Colorado.

Is a Cash Advance Legal in Colorado?

Payday loans are legal in Colorado but capped at 36 percent APR, which has pushed the traditional product out of the state. Colorado voters approved Proposition 111 in November 2018, and from February 1, 2019 the Deferred Deposit Loan Act, C.R.S. 5-3.1-101 and following, has limited the finance charge on any deferred deposit or payday loan to an annual percentage rate of 36 percent (C.R.S. 5-3.1-105). The Act's structural rules were already strict: a lender may not have more than $500 financed to you at any time (5-3.1-106), the minimum loan term is six months with no maximum (5-3.1-103), you may prepay without penalty and receive a prorated refund of the finance charge, you may rescind by 5 p.m. the next business day, and a loan may be renewed only once (5-3.1-108). The Consumer Credit Unit of the Colorado Attorney General's office administers the Uniform Consumer Credit Code and licenses these lenders. For a borrower, the practical meaning is that any payday loan you can legally get in Colorado is a six-month installment loan at credit-union pricing, and anything priced like a classic two-week payday loan is not a Colorado-licensed product.

The governing law is Colorado Deferred Deposit Loan Act, C.R.S. 5-3.1-101 to 5-3.1-123 (Uniform Consumer Credit Code, Article 3.1) (C.R.S. 5-3.1-102, 5-3.1-103, 5-3.1-105, 5-3.1-106, 5-3.1-108).

Loan Limits and Terms in Colorado

Colorado rebuilt the payday loan twice. A 2010 law imposed the six-month minimum term, the $500 cap and the one-renewal rule, turning the product into a small installment loan. Proposition 111 then cut the price to a flat 36 percent APR from February 2019. Section 5-3.1-105 lets the lender charge only a finance charge at or under that rate and only the other charges the Act names, such as a dishonored-instrument fee under 5-3.1-112. Because the minimum term is six months, a $300 loan repaid on schedule accrues interest over that period, but 5-3.1-103 requires the lender to accept prepayment and 5-3.1-105 requires a prorated refund of the finance charge, so paying early always cuts the cost. The Act defines a lender to include anyone offering these loans by mail, telephone or internet (5-3.1-102), so the same rules apply online.

What a $300 Loan Costs in Colorado

C.R.S. 5-3.1-105 caps the finance charge on a deferred deposit loan at a 36 percent annual percentage rate. Although the minimum contract term is six months (5-3.1-103), you may prepay at any time and the lender must refund the unearned finance charge pro rata, so a $300 loan repaid after 14 days costs $300 x 0.36 x 14 / 365 = $4.14, repaid as $304.14. APR = 4.14 / 300 x 365 / 14 = 0.36, or 36 percent. Held for the full six months the same loan would accrue roughly $54 if the whole balance stayed out, and less with installment payments.

Run your own numbers with the cash advance calculator.

Consumer Protections and Who to Call in Colorado

• The finance charge on a deferred deposit loan may not exceed a 36 percent annual percentage rate, and the lender may impose only the charges the Act expressly authorizes (C.R.S. 5-3.1-105).
• No lender may lend you more than $500 or have more than $500 financed to you at any time, and you may rescind the loan by 5 p.m. on the next business day after the transaction (C.R.S. 5-3.1-106).
• The minimum loan term is six months, there is no minimum finance charge, and the lender must accept prepayment without penalty (C.R.S. 5-3.1-103).
• If you prepay or the loan is renewed before maturity, the lender must refund a prorated portion of the finance charge based on the time left before maturity (C.R.S. 5-3.1-105 and 5-3.1-108).
• A deferred deposit loan may be renewed no more than once, and the renewal is also capped at 36 percent APR; after that the balance must be repaid in cash or its equivalent (C.R.S. 5-3.1-108).
• The loan must be documented in a written agreement signed by both parties that states the amount, the finance charge in dollars and as an APR, the lender's contact details and the date the instrument may be deposited (C.R.S. 5-3.1-103).
• The Act applies to anyone who offers or makes a deferred deposit loan by mail, telephone or internet, and the Attorney General's Consumer Credit Unit takes complaints by phone at 720-508-6000 and online at complaints.coag.gov (C.R.S. 5-3.1-102).

Complaints and licence checks go to the Colorado Attorney General, Consumer Credit Unit (Administrator of the Uniform Consumer Credit Code): 720-508-6000, coag.gov/office-sections/consumer-protection/consumer-credit-unit, or file a complaint at the regulator's complaint page. The federal CFPB also takes complaints about any lender.

Online vs Storefront Lenders in Colorado

The Deferred Deposit Loan Act defines a lender as any person who offers or makes a deferred deposit loan, including by mail, telephone or internet (C.R.S. 5-3.1-102), so an online lender serving Coloradans needs the same supervised lender license from the Attorney General's Consumer Credit Unit and must price at or under 36 percent APR with a six-month minimum term. Since the cap took effect in February 2019 most storefront payday lenders have left the state, and the offers Colorado residents now see for two-week loans at several hundred percent come from out-of-state and tribal websites that are not licensed here. Those loans are outside the Act, so the $500 cap, the rescission right, the prorated refund and the one-renewal limit do not apply, and the Consumer Credit Unit cannot examine the lender for you. The Attorney General's office accepts complaints about unlicensed lenders and about licensees, and its licensee records let you check a company before you share bank details. A lender that will not state a Colorado license or that quotes a rate above 36 percent is not operating under Colorado law.

Alternatives If a Payday Loan Is Not the Right Fit

The Colorado deferred deposit loan itself is now a reasonably priced product: up to $500 at no more than 36 percent APR, repayable over at least six months, with a prorated refund if you pay early. Beyond it, supervised lenders licensed under the Uniform Consumer Credit Code make larger installment loans under the Code's rate rules, and banks and credit unions lend under their charters. Federal credit unions can offer Payday Alternative Loans, and several Colorado credit unions run small emergency loan programs that were built after the 2019 cap. Employer payroll advances and earned wage access avoid a loan entirely. For a bill you cannot cover, Colorado's LEAP program helps with heating costs, county human services offices handle emergency assistance, and Colorado 2-1-1 connects residents with rent, utility and food help. A payment arrangement with the creditor is usually the cheapest fix of all.

Compare the installment loan and payday alternative loan options before you decide.

Cities We Cover in Colorado

• Colorado Springs, COLocal cost of living, ordinances and help lines
• Denver, COLocal cost of living, ordinances and help lines
• Fort Collins, COLocal cost of living, ordinances and help lines
• Thornton, COLocal cost of living, ordinances and help lines

Frequently Asked Questions

Nearby States

• WyomingThe fee cap, a worked example and the regulator to call in Wyoming.
• NebraskaThe fee cap, a worked example and the regulator to call in Nebraska.
• KansasThe fee cap, a worked example and the regulator to call in Kansas.
• OklahomaThe fee cap, a worked example and the regulator to call in Oklahoma.
• New MexicoThe fee cap, a worked example and the regulator to call in New Mexico.
• UtahThe fee cap, a worked example and the regulator to call in Utah.
• ArizonaThe fee cap, a worked example and the regulator to call in Arizona.