New Colorado loan lenders laws to go into effect

New laws intended to limit the short term cash loans offered in Colorado are going to go into effect. New caps could be put on payday advance direct lenders in Colorado. Legislators had called for a stronger bill, but lobbyists had been pushing for a weaker bill. Article source – New Colorado loan lenders laws to go into effect by Personal Money Store.

Keeping the interest rates in check

Annual interest rates on personal debt loans in Colorado will be limited to 45 percent annual interest rates. Like most payday cash advance loan products, the term of the loan is much shorter than a year, but interest rates are often calculated on an annual basis. The current cap on these loans in Colorado is 300 percent annual interest. A couple of legislators were pushing for a 36 percent cap.

Extending the term of the loans

Currently, the short term installment loans offered in Colorado can have terms as short as two weeks. As of August, this term could be stretched out. The minimum term a lender can offer could be six months. Borrowers will even have to be offered the ability to repay the loan early.

Monthly and origination fees

To help ensure that short term loan credit is still available within the state, the new bill allows both monthly and origination fees on these loans. Lenders will be allowed to charge an origination fee of $ 75, and monthly fees of $ 7.50 per $ 100 borrowed, up to $ 30 maximum.

The debate over payday cash advances in Colorado

There has been a heavy debate over cash until payday in Colorado. Some people say that the pay day loan industry should be banned entirely. The current Colorado bill passed with just one vote. Most state legislatures will probably end up reconsidering this controversial issue time and time again.