New laws intended to limit the short term money loans offered in Colorado are likely to go into effect. Colorado payday advance direct lenders are going to have both interest terms and repayment terms capped. Legislators had called for a stronger bill, but lobbyists had been pushing for a weaker bill. Article resource – New Colorado payday loan lenders laws to go into effect by Personal Money Store.
Limiting interest rates
The interest rates of personal debt loans in Colorado will now be limited to 45 percent annual interest. Like most fast cash loans 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 loan limits in Colorado are set at 300 percent annual interest. A couple of legislators were pushing for a 36 percent cap.
Extending repayment terms
Currently, the short term installment loans offered in Colorado can have terms as short as two weeks. When the new legislation goes into effect in August, that term could be extended. The minimum term a lender can offer can be six months. Borrowers will also be required to have the flexibility of repaying the loan earlier than the six month term.
Monthly and origination fees
To help ensure that short term installment loan credit is still available within the state, the new bill allows both monthly and origination fees on these loans. The lender could be able to charge $ 75 to originate the loan.
The debate over payday loans in Colorado
In almost each state, the paydayloans debate has been heavy. Some legislators call for cash advance industry businesses to be banned. Just one vote made the difference in passing the Colorado bill. No matter what, payroll loans will continue to be a controversial issue for most state legislators.
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