Short-Term Borrowing Options in Colorado

Colorado has effectively banned traditional payday loans. In their place, you'll find installment loans capped at a 36% Annual Percentage Rate (APR). While that's a massive improvement over the 400%+ APRs of the past, it's still expensive money. Your goal shouldn't be to find the best 36% loan, but to avoid needing one at all.

What does a 36% APR loan actually cost in Colorado?

A 36% APR is the all-in maximum cost by law. This isn't an interest rate plus fees; it's the total package. A lender charging a penny over 36% APR cannot legally collect the debt. Here’s what that looks like in real dollars for a short-term loan.

How did Colorado get rid of payday loans?

Colorado voters passed Proposition 111 in 2018, imposing a hard 36% APR cap that dismantled the storefront payday loan industry. Before Prop 111, lenders could charge fees that translated to APRs well over 200%. The campaign, supported by groups like the Center for Responsible Lending, argued that high costs trapped borrowers in cycles of debt. The 36% cap was a deliberate move to align Colorado with states like South Dakota and Nebraska, creating a supervised installment marketplace instead of a deferred deposit (payday) one.

Is a 36% APR loan a good deal?

No, a 36% APR is still extremely expensive and should be your absolute last resort. While it's a huge consumer victory compared to triple-digit rates, the math is punishing. On a $500 loan over six months, you'd pay about $90 in finance charges. That's $90 that won't go toward rent, groceries, or gas. The distance between a 36% loan and a 400%+ product translates here into weeks of financial recovery. Think of this cap as a protective ceiling, not a target.

What are my alternatives before taking a high-cost loan?

Before you commit to a 36% APR loan, exhaust every one of these options. The goal is to find capital at a 0% cost.

1. Contact your local United Way: Dial 2-1-1 or call Mile High United Way directly. Their specialists can connect you to local grants, utility assistance programs, and low-interest loans you likely don't know exist. This is your first and most important call.
2. Reach out to community nonprofits: Organizations like the Salvation Army of Colorado provide emergency aid for rent, utilities, and other critical needs.
3. Check your bank's small-dollar loan program: Some national banks offer small loans to existing customers. For example, Bank of America's Balance Assist program offers $100-$1,000 loans with APRs around 100-200%—still high, but potentially better than alternatives if you're already a customer.
4. Use an Earned Wage Access (EWA) app: If your employer offers a service like DailyPay or Payactiv, you can access money you've already earned ahead of payday. There's usually a small fee, but no interest (0% APR). This is far cheaper than any loan.
5. Negotiate payment plans: Call your bill providers—medical offices, utilities, credit card companies—and ask for a hardship extension or payment plan. They'd rather get paid slowly than not at all.

Where can I complain if a Colorado lender breaks the rules?

File a free complaint with the Colorado Attorney General's Consumer Credit Unit. This state regulator licenses lenders and examines grievances. If a lender in Denver, Colorado Springs, or anywhere else in the state is charging more than 36% APR, pressuring you, or violating the $500 limit, file a complaint. The process is straightforward, and most issues are resolved within 30–60 days.

Questions from Colorado Borrowers