However, Colorado understands that, unfortunately, sometimes these loans are the only place people have to turn. They do not qualify for a bank loan and have no friends or family from whom they can borrow sorely needed funds. For this reason, the state still allows installment loans, but with heavy regulations. As with any small-amount cash advance, it should not be used for frivolous spending. It should be the last option when all others have been exhausted. If you need an installment loan, you have several different options in Denver, including our top three services: 100DayLoans, NetLoanUSA and FaxFreeCash. These three offer online installment loans, but our lineup also includes good choices for in-store, local installment loans. You can read more about installment loans and Colorado laws in our articles about Denver loans.
Payday Loan Companies: What to Look For
We recommend you shop around and find the best option for a Denver installment loan. The good news is the APR and fees don't change from service to service because of state laws. If a service offers different figures, it is not in compliance with the law and you should not accept a loan from it.
By law, the maximum loan amount you may receive with an installment loan in Denver is $500. Although taxes and fees push the amount you pay back higher, your principal amount cannot exceed this amount. Some services may not lend you more than 25% of your monthly income, but this is not state law. Some services don't lend the full $500 to first-time applicants, and some services may lend you less based on your credit.
The set APR for installment loans is 45%. This is significantly lower than the 300% to 800% you see with payday loans. There are additional fees that increase the APR, but state law also regulates these fees. If you see an advertised APR of 200% to 220%, this is normal, as long as it includes the fees. There are two fees you see with every installment loan: an origination fee and a maintenance fee. The origination fee is 20% of your loan amount up to $300 and an additional 7.5% for amounts above $300. The maintenance fee is 7.5% per month but cannot exceed $30.
In addition to rates and fees set by law, we also took into consideration other features of installment loans. We looked at the total number of Denver branches and the approval time frame. Some services expedite the loan process by having an online application, but you must go into a store to receive your funds. Some services offer online loans with the potential for same-day deposits.
While payday loans have a maximum term, Denver installment loans have a minimum term so that your payments are spread out over a longer time, making them smaller and more manageable. The minimum term is six months, with one rollover permitted by law. However, not all services offer rollovers even though the law allows them.
When you repay your loan, many services automatically debit your checking account on the due date, but some require that you go into a local store to make a payment or process an EFT online. Because services differ, make sure you understand how payments with your lenders work.
The majority of services require six equal monthly payments, but some services require payments from each paycheck if your employer pays you twice a month. This means that while you make payments more frequently, they are smaller and make less of an impact on each of your paychecks. The following is an example of standard payments for both single and bi-monthly payments. While these are approximations, your payments should not significantly deviate from these numbers as rates and fees are the same across the board in Denver and the state of Colorado:
Total amount repaid: $170
Monthly payments: $28
Estimated APR: 212%
Total amount repaid: $513
Monthly payments: $85
Estimated APR: 212%
Total amount repaid: $793
Monthly payments: $132
Estimated APR: 180%
Total amount repaid: $169
Estimated APR: 208%
Total amount repaid: $509
Estimated APR: 208%
Total amount repaid: $788
Estimated APR: 175%
Help & Support
If you need assistance or have any questions about your loan, we recommend calling your local branch. We had positive experiences calling Denver stores with questions. While most services offer support via email, we received few responses to email inquiries, and most of those directed us to call customer support. Many companies' websites are useful and provide payment schedules and FAQs.
Colorado established laws and regulations over installment loans to protect you from the negative effects of payday and other short-term loans. However, there is still risk involved with any loan. Take caution before accepting a loan, do not accept more than you need, understand your payments and know when the payments are due. Although you cannot get a payday loan in Denver, installment loans are a safer alternative.
An interest rate cap is a derivative in which the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price. An example of a cap would be an agreement to receive a payment for each month the LIBOR rate exceeds 2.5%.
Similarly an interest rate floor is a derivative contract in which the buyer...