State lending rules
Colorado Payday & Small-Dollar Loan Laws
36% APR cap (Prop 111)
Colorado voters passed Proposition 111 in 2018, capping payday loan APRs at 36% inclusive of all fees. The cap effectively ended high-cost storefront lending in the state.
Maximum loan amount
$500
Maximum term
6 months minimum
APR / finance charge
36% APR (including all fees)
Rollover rule
No rollovers permitted
Cooling-off period
None required
Statute
C.R.S. § 5-3.1-101
Colorado lending overview
Colorado voters fundamentally changed the state's lending landscape in 2018 by passing Proposition 111. This measure established a strict 36% interest rate cap on payday loans, a limit that includes all finance charges and origination fees. Under these regulations, short-term loans are restricted to a maximum principal of $500. Additionally, state law requires a minimum repayment term of six months, ensuring borrowers have more time to settle their balances than the two-week cycles permitted in other jurisdictions. This legislation led to a significant reduction in traditional high-cost storefront lending across the state.
Residents seeking immediate capital typically choose between small-dollar payday loans or larger personal installment loans from banks and credit unions. Because the interest rate cap applies broadly, emergency loans in the state function differently than typical high-interest products found elsewhere. Borrowers often use these funds for unexpected medical bills or car repairs, relying on fixed monthly payments over the mandatory six-month period. While personal loans for larger amounts are available through traditional lenders, the 36% cap remains the primary regulatory safeguard for those accessing smaller amounts of short-term credit.
What the law means for borrowers
Colorado's rules affect whether payday loans are available, how much a borrower may be able to receive, how long repayment can last, and what finance charges may apply. Even where payday lending is legal, the total repayment amount can be substantially higher than the amount borrowed.
Before accepting a loan offer
- Confirm the lender is licensed or otherwise authorized to operate in Colorado.
- Compare APR, fees, payment schedule, and total repayment amount.
- Check whether rollovers, renewals, or refinancing are allowed or restricted.
- Consider lower-cost alternatives such as credit-union small-dollar loans, payment plans, employer advances, or local assistance programs.
Who regulates lenders in Colorado
Colorado Attorney General – UCCC
https://coag.gov/office-sections/consumer-protection/uccc/
File a complaint with the regulator above if a lender violates state law. You can also file with the CFPB.
Loan options in Colorado
Compare state-specific loan pages before applying. Product availability depends on state law, lender licensing, underwriting, and your financial profile.
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Also useful: APR calculator · Compare loan types · State loan laws
Other state loan laws
Reviewed by Darnell Pierce, MBA. Last reviewed January 2026. This page is informational and is not legal advice. Verify current rules with the state regulator before borrowing.