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Colorado Interest Rates Laws

Each state has limits on the amount of interest a lender may charge, usually with some exceptions, historically referred to as usury laws. Colorado's consumer loan interest rate limit of 12 percent doesn't apply to savings and loans, mortgages, business loans, and agricultural loans. And even though there's a statutory limit, it's not always enforceable because consumers may agree to higher rates when signing the contract or simply clicking 'I agree' on a Web browser.

If there's no agreement to the terms of the loan, it's capped at 8 percent. Colorado also has one of the highest interest rate limits in the country for non-consumer loans, at 45 percent. Violation of this limit is charged as a Class 6 Felony, punishable by 12 to 18 months in prison and a fine of $1,000 to $100,000.

The following table lists additional details about interest rate limits in Colorado. See FindLaw's Debt Collection Laws and Personal Finance sections to learn more.

Legal Maximum Rate of Interest 8% if there is no agreement (§5-12-101); maximum rate that may be contracted for is 45% (§5-12-103); interest on consumer loan may not exceed 12% unless made by supervised lender (§5-2-201)
Penalty for Usury (Unlawful Interest Rate) Criminal penalty for knowingly exceeding 45%, Class 6 felony (§18-15-104)
Interest Rates on Judgments 8% if none specified in contract; if contract rate is variable, then at rate on day of judgment (§5-12-102[4])
Exceptions Savings and loans (§11-41-115); mortgages (§5-13-101); business and agricultural loans (§5-13-102); small business loans (§5-13-103)

Note: State laws are constantly changing through new legislation, appeals court decisions, ballot initiatives, and other means. Make sure you contact a Colorado consumer protection attorney or conduct your own legal research to verify the state law(s) you are researching.

Usury: An Overview

The term usury came into use in the Middle Ages, when it meant any type of interest charged in exchange for lending money. It carried a more negative connotation until it became more common, and then the term was mostly reserved for excessive interest rates. With the formation of modern governments came interest rate limits known as usury laws.

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