Payday Loans in Colorado: Laws, the 36% Cap, and Your Options (2026)

Payday loans in Colorado are legal, but they no longer look like payday loans elsewhere, which is why our state table lists Colorado as effectively prohibited alongside the other 36% states. Since Proposition 111 took effect on February 1, 2019, the finance charge is capped at 36% APR with no other fees, every loan runs at least six months, and no lender can have more than $500 out to you at once. The law is the Deferred Deposit Loan Act, C.R.S. Title 5, Article 3.1. This page covers what the Act allows, what a loan costs, your rights, and which of the lenders we review serve Colorado. For how Colorado compares with every other state, see payday loan laws by state.

Colorado payday loan rules at a glance

Rule	Colorado
Legal status	Permitted, through a licensed supervised lender (C.R.S. 5-3.1-116)
Regulator	Consumer Credit Unit, Colorado Department of Law, 720-508-6012
Rate cap	36% APR, the whole finance charge (C.R.S. 5-3.1-105, Proposition 111)
Other fees	None, except one returned-instrument charge of up to $25 (C.R.S. 5-3.1-112)
Maximum loan	$500 from any one lender at any time (C.R.S. 5-3.1-106)
Minimum term	Six months; no maximum (C.R.S. 5-3.1-103)
Waiting period	At least 30 days between loans open at the same time with one lender
Renewals	One at most, at no more than 36% APR; then the debt must be paid (C.R.S. 5-3.1-108)
Early repayment	Allowed without penalty, with a prorated refund of the finance charge
Right to cancel	Until 5 p.m. the next business day (C.R.S. 5-3.1-106(2))
Criminal liability	None for the loan or a bounced check, unless the account was already closed (5-3.1-120)
Online lenders	Covered whether or not they have a location in Colorado (C.R.S. 5-3.1-121)
Military borrowers	36% federal MAPR cap under the Military Lending Act

How a Colorado payday loan works

You give the lender a check (the Act calls it an instrument), and the lender advances the money. The written agreement sets the date the lender may deposit your check, which cannot be sooner than six months from the loan date. You can pay the loan off before then at any time, and the lender must accept the payment without a penalty and refund the part of the finance charge for the time left (C.R.S. 5-3.1-103 and 5-3.1-105).

Proposition 111 set a single 36% APR cap and says a lender may charge only the charges the Act expressly authorizes. The voters’ declaration in the Act found that payday lenders were charging up to 200% a year and set out to lower the maximum to 36% APR (C.R.S. 5-3.1-101.5).

What a payday loan costs in Colorado

At the 36% cap, a six-month loan repaid in one payment at the end costs about 18% of the amount borrowed:

Amount borrowed	Interest at 36% APR over six months	Total repaid
$100	About $18	About $118
$300	About $54	About $354
$500	About $90	About $590

These are our own figures, not a quote; your Truth in Lending disclosure states the actual finance charge and APR. Paying early cuts the cost, because the lender must refund the unearned finance charge. Paying $500 back after three months instead of six would cost about $45 instead of $90.

For comparison, a lender in a state that allows a $15-per-$100 fee on a two-week loan charges $75 on $500 for 14 days, about 391% APR. The Colorado cap is roughly a tenth of that rate.

Renewals and new loans

A Colorado payday loan can be renewed once, at no more than 36% APR, with a prorated refund if it is renewed early. After that one renewal, the debt has to be paid; if it is not, the lender may deposit your check (C.R.S. 5-3.1-108). Once a loan is paid off, you can enter a new agreement with the lender (C.R.S. 5-3.1-108(3)). A second loan while the first is still open is allowed only if the total stays at or under $500 and at least 30 days separate the two loans (C.R.S. 5-3.1-106).

Your rights

1. A licensed lender. Confirm the license with the Consumer Credit Unit at 720-508-6012 or [email protected].
2. A 36% ceiling. The finance charge cannot exceed 36% APR, and no other charges are allowed except one returned-instrument charge.
3. Six months to repay. No payday loan in Colorado can be due in less than six months.
4. Early payoff with a refund. Pay any time, with no penalty and a prorated refund of the finance charge.
5. Next-day cancellation. Rescind by 5 p.m. the next business day.
6. Limited default costs. If your check bounces, the lender can charge one returned-instrument fee of up to $25, plus court costs and attorney fees a court awards, which cannot exceed the loan amount. It cannot collect any other fees for the default (C.R.S. 5-3.1-112).
7. No criminal penalty. You cannot face a criminal penalty for taking the loan or for a bounced check, unless the account was closed before the agreed deposit date (C.R.S. 5-3.1-120).
8. The federal Truth in Lending box. The APR, finance charge, amount financed, and total of payments must be disclosed before you sign.

What happens if you cannot repay

Call the lender before the due date; paying part early lowers the interest you owe. If the check bounces, the lender can pursue the debt through civil collection and the fees above, nothing more. If an unlicensed lender makes you a loan, the Uniform Consumer Credit Code says you are not obligated to pay the finance charge and can recover a penalty from that lender (C.R.S. 5-5-201), so report it to the Consumer Credit Unit. Read what happens if you default on a payday loan for how collection works, and how to escape the payday loan cycle if one loan keeps leading to the next. If the real problem is a bill you cannot cover, start with what to do when you can’t make this month’s payment.

Alternatives worth trying first in Colorado

A payday loan is legal in Colorado, and capped at 36% APR, so these are the routes to compare it with, roughly cheapest first:

Option	What it costs	The catch
Payment plan on the bill itself	Often nothing	You have to ask before the due date
211 referral to rent, utility, or food help	Nothing	What is funded varies by county
Federal credit union PAL I	Up to 28% APR plus an application fee of up to $20; $200 to $1,000, 1–6 months	One month of membership first; one PAL at a time
Federal credit union PAL II	The same caps; up to $2,000, 1–12 months	Not every federal credit union offers one
Colorado payday loan	36% APR cap, no other fees: about $90 interest on $500 over six months (above)	Runs at least six months; a lender can have only $500 out to you

The credit union limits come from federal regulation (12 CFR 701.21(c)(7)): no more than three PALs in six months, and no rollovers. Call 211 to reach the local referral line. Employer pay advances and earned-wage apps cost more than their small fees suggest; payday loan alternatives that actually work has the numbers for each option. If an installment loan is on the table, installment loans vs. payday loans explains how to compare total cost.

If you do borrow, borrow the smallest amount, pay it off as early as you can to shrink the interest, and confirm the lender’s Colorado license before you sign.