Colorado Interest Rate Laws


Laws relating to interest rates in the State of Colorado are dealt under various Statutes.  According to Article 12 (Interest), Title five (Consumer Credit Code), Section 101, if there is no agreement or provision of law for a different rate, then the interest on money shall be at the rate of eight percent per annum.  Pursuant to Section 5-12-103 of the Consumer Protection Code, parties to any bond, promissory note, or other instrument of writing may agree upon the payment of a greater or higher rate of interest than eight percent per annum.  In such cases the rate of interest must not exceed 45 percent per annum, and any such stipulation may be enforced in any court of competent jurisdiction in the state.  According to Section 5-2-201, interest rate for a consumer loan must not exceed 12 percent per year on the unpaid balance of the amount financed, unless made by supervised lender.

According to Section 18-15-104 of the Criminal Code, any person who knowingly and willfully charges, takes, or receives any money or other property as a loan finance charge where the charge exceeds an annual percentage rate of forty-five percent commits the crime of criminal usury, which is a class 6 felony.

According to Section 5-12-102 of Consumer Credit Code, the interest shall be eight percent per annum for all moneys or value of all property after they are wrongfully withheld to the date of judgment is entered.  If rate is entered in the contract, the same rate applies on the judgment.  Furthermore, if contract rate is variable, then the rate is as on the date of judgment entered.

Exceptional circumstances where an interest rate can be charged above the prescribed limit:

  1. Section 11-41-115 of Title 11 (Financial Institutions Savings And Loan Associations): Any savings and loan association can charge and recover rate of interest as may be provided in the notes or other evidences of indebtedness taken by the Financial Institutions Savings And Loan Association.
  2. Section 5-13-101 of Consumer Credit Code: State of Colorado is exempted from charging a fixed rate of interest with respect to loans, mortgages, credit sales, and advances made to apply in this state.
  3. Section 5-13-102 of Consumer Credit Code: State of Colorado is preempted from state’s interest rates on business and agricultural loans.
  4. Section 5-13-103 of Consumer Credit Code: State of Colorado is preempted from state’s interest rates on small business loans.

C.R.S. 5-12-101

Legal rate of interest
If there is no agreement or provision of law for a different rate, the interest on money shall be at the rate of eight percent per annum, compounded annually.

C.R.S. 5-12-103

Greater rate may be stipulated
(1) The parties to any bond, bill, promissory note, or other instrument of writing may stipulate therein for the payment of a greater or higher rate of interest than eight percent per annum, but not exceeding forty-five percent per annum, and any such stipulation may be enforced in any court of competent jurisdiction in the state, except as otherwise provided in articles 1 to 6 of this title. The rate of interest shall be deemed to be excessive of the limit under this section only if it could have been determined at the time of the stipulation by mathematical computation that such rate would exceed an annual rate of forty-five percent when the rate of interest was calculated on the unpaid balances of the debt on the assumption that the debt is to be paid according to its terms and will not be paid before the end of the agreed term.
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C.R.S. 5-2-201

(1) With respect to a consumer loan other than a supervised loan, including a revolving loan, a lender may contract for and receive a finance charge calculated according to the actuarial method not exceeding twelve percent per year on the unpaid balance of the amount financed.
(2) With respect to a supervised loan or a consumer credit sale, except for a loan or sale pursuant to a revolving account, a supervised lender or seller may contract for and receive a finance charge, calculated according to the actuarial method, not exceeding the equivalent of the greater of either of the following:
(a) The total of:
(I) Thirty-six percent per year on that part of the unpaid balances of the amount financed that is one thousand dollars or less;
(II) Twenty-one percent per year on that part of the unpaid balances of the amount financed that is more than one thousand dollars but does not exceed three thousand dollars; and
(III) Fifteen percent per year on that part of the unpaid balances of the amount financed that is more than three thousand dollars; or
(b) Twenty-one percent per year on the unpaid balances of the amount financed.
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C.R.S. 18-15-104

Engaging in criminal usury
(1) Any person who knowingly charges, takes, or receives any money or other property as a loan finance charge where the charge exceeds an annual percentage rate of forty-five percent or the equivalent for a longer or shorter period commits the crime of criminal usury, which is a class 6 felony.
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C.R.S. 11-41-115

Interest rates on loans
(1) Any savings and loan association may charge, contract for, and recover such rate of interest as may be provided in the notes or other evidences of indebtedness taken by the association. Notes secured solely by the pledge of shares and notes secured by real estate mortgages repayable upon the sinking fund plan shall be nonnegotiable in form, and all other notes, including those insured by the federal housing administrator and those taken in connection with loans to veterans under the provisions of the “Servicemen’s Readjustment Act of 1944″, may be either negotiable or nonnegotiable in form.
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C.R.S. 5-13-101

Mortgages
In accordance with section 501 (b) (2) of Public Law 96-221, it is declared that the state of Colorado does not want the provisions of subsection 501 (a) (1) of Public Law 96-221 removing the limits on the rate or amount of interest, discount points, finance charges, or other charges which may be charged, taken, received, or reserved with respect to loans, mortgages, credit sales, and advances made to apply in this state. The rates established in articles 1 to 9 of this title shall control consumer credit transactions in the state of Colorado.

C.R.S. 5-12-102

Statutory interest
(1) Except as provided in section 13-21-101, C.R.S., when there is no agreement as to the rate thereof, creditors shall receive interest as follows:
(a) When money or property has been wrongfully withheld, interest shall be an amount which fully recognizes the gain or benefit realized by the person withholding such money or property from the date of wrongful withholding to the date of payment or to the date judgment is entered, whichever first occurs; or, at the election of the claimant,
(b) Interest shall be at the rate of eight percent per annum compounded annually for all moneys or the value of all property after they are wrongfully withheld or after they become due to the date of payment or to the date judgment is entered, whichever first occurs.
(2) When there is no agreement as to the rate thereof, creditors shall be allowed to receive interest at the rate of eight percent per annum compounded annually for all moneys after they become due on any bill, bond, promissory note, or other instrument of writing, or money due on mutual settlement of accounts from the date of such settlement and on money due on account from the date when the same became due.
(3) Interest shall be allowed as provided in subsection (1) of this section even if the amount is unliquidated at the time of wrongful withholding or at the time when due.
(4) Except as provided in section 5-12-106, creditors shall be allowed to receive interest on any judgment recovered before any court authorized to enter the same within this state from the date of entering said judgment until satisfaction thereof is made either:
(a) At the rate specified in a contract or instrument in writing which provides for payment of interest at a specified rate until the obligation is paid; except that if the contract or instrument provides for a variable rate, at the rate in effect under the contract or instrument on the date judgment enters; or
(b) In all other cases where no rate is specified, at the rate of eight percent per annum compounded annually.

C.R.S. 5-13-103

Small business loans
In accordance with section 524 of Public Law 96-221, it is declared that the state of Colorado does not want the amendments to the “Small Business Investment Act” made by section 524 of Public Law 96-221 prescribing interest rates for small business loans to apply in this state. The rates established in articles 1 to 9 of this title shall control consumer credit transactions in the state of Colorado.