Do you live in Colorado? Are you in need of a loan to last until payday? Then we have got just the right solution for you. Get fast payday loans in Colorado by reaching out to us. Nobody should struggle to food on the table and not be able to afford the necessities, hence why our services are extended to anyone who wants a small loan to make ends meet until they receive their monthly paycheck.
What are Payday Loans?
Payday loans, also known as cash advance loans or check advance loans, are like a temporary fix, almost like a stitch in a pocket through which money keeps flowing out, but on a larger scale. It is a short-term money borrowing scheme that allows you to take money from a willing entity to which you are obligated to pay back at a high-interest credit that is evaluated by linking to your paycheck. The amount of loan you can borrow initially, known as a principal, will also depend on your salary. The principal only applied to the outstanding amount of the loan that remains.
To understand better, let’s put things into perspective. Suppose you are to borrow a loan with a principal of $1000 along with an interest rate of 5%. In that case, you will be obligated to pay the loan off at an interest rate of $41 per month approximately (note that month is used here as paychecks are given monthly and not annually).
Understanding the Process of Borrowing a Payday Loan
Payday loans are lent at a high-interest rate; hence collateral is rarely a requirement. To apply for a payday loan, you will require a statement from your employer showing your income as your interest will be set by the lender based on it. Other factors determine whether you qualify for a loan or not, such as credit history and credit score.
Credit history is a full payment timeline of how responsibly you have returned a debt. This history is collected from several resources like your bank provider, a collection agency, and the government (mostly taxes).
On the other hand, a credit score is a quantitative indicator/scale of your creditworthiness. The score ranges from between 300 to 850. The better your creditworthiness, the more willing a lender will be to offer a payday loan. If you do not have an excellent credit history or score, do not worry. We cover everyone who wishes to receive a payday loan, no questions asked.
Qualifying for a Payday Loan in Colorado
Note that payday loans are not available in 12 states as they have been banned by state law. Every state that does allow lending payday loans has different criteria that need to be met. In the state of Colorado, the maximum value of a payday loan that can be borrowed is fixed at $500. This does not merely mean a limit on how much you can borrow at once but rather also include the overall due, meaning if your accumulative debt currently stands at $500 in value, you cannot sign up for a payday loan.
Also, note that there is a cool-down period between borrowing two payday loans; this means that you will have to wait a certain period before you can apply for another payday loan; in the state of Colorado, this cool-down lasts 30 days (which is approximately one month) hence you are only eligible for a loan after a subsequent month has passed.
Additionally, it would help you know that by law, under article 3.1 of title 5, no borrower can exceed a charge of 20% on a $300 loan, and there is a + 7.5% increase on this for every $100 added. So, if you were to borrow a loan worth $500, your cumulative charge would add up to 35%. You will be charged a “fine” known as monthly maintenance by your lender on any outstanding payments at the rate of $7.5 for every $100 that is borrowed with a monthly limit of $30.
The (Dis)advantages of Payday Loans
Every loan has its pros and cons. Knowing the benefits that each loan provides will allow you to make a comprehensive decision on what type of loan you should settle for. In this section, we will be covering the pros and cons of acquiring a payday loan.
The Pros
1. Ease of Acquiring
Payday loans are quickly processed within 24 hours and are processed 24 hours a day, seven days a week; some services, like ours, also allow applying for the loan via online application. Traditional loans have a lengthy acquiring process, and even after the process is done, you might get rejected for the loan. The chances of rejection are slim when it comes to payday loans unless a state-mentioned law is involved; that’s a whole other issue.
2. Fewer Eligibility Requirements
The checkboxes that need to be met to qualify for a payday loan are much more condensed for payday loans than traditional loans. The requirement includes the following;
- The borrower needs to of 18 years of age,
- Should have acquired social security or ID number,
- Have a stable and regular paying job.
- Bad Credit is not a Hindrance
Often, even in circumstances where your credit score is low, payday loans are not strict in lending money. Your credit is often not even checked, which means there are fewer chances of your credit score dropping when an investigation is done through hard credit inquiry.
The Cons
1. Expensive Returns
Payday loans are notorious for their payback interest rate; some states have an interest rate of 400%. In the state of Colorado, however, the maximum rate is leveled at 214%.
2. Entrapment in Debt Cycle
Once you’ve acquired a payday loan, you will often find yourself needing to apply for another. Statistically speaking, approximately 0.25% of borrowers reapply for payday loans, and amongst them, more than 50% end up accumulating new fees due to delayed or non-payment of loans.