Colorado's safe harbor legislation authorizes cash advance companies to issue loans with interest rates in the triple digits and based on checks written on borrowers' bank accounts. Pursuant to Colorado law, a consumer cannot have more than one payday advance loan pending at one time.
Colorado law permits cash advance lenders to issue loans to consumers for a maximum amount of $500 per borrower.
The maximum loan term that a payday loan store can offer is 40 days.
Borrowers are allowed one renewal or extension.
Under Colorado law, the maximum finance rate that a cash advance lender can charge on the first $300 borrowed is 20%; on loan amounts over $300, the finance rate cannot exceed 7.5%. The finance fee on a two-week loan in the amount of $100 is $20. The maximum finance charge that a payday loan company can charge on loans of $500 is $75.
The annual percentage rate (APR) for a two-week loan for $100 is 520%.