Almost eight years after Colorado enacted a payday law reform bill in 2010, payday lenders in Colorado continue to ensnare customers in a cycle of high-cost debt. Customers are drawn in by promises of easy cash. But as the high costs mount, the struggle to cover monthly expenses is compounded by the struggle to cover the cost of the payday loan. The resulting cycle of debt is often difficult to escape. This report analyzes data published by the Colorado Attorney General’s Consumer Credit Unit (2016 Deferred Deposit/Payday Lenders Annual Report) , and the Attorney General’s Demographic and Statistical Report released in August 2016.

Key Findings

  • Colorado payday loan customers in 2016 paid an average annual percentage rate (APR) of 129%. The average loan was for $392, cost $119 in interest and fees, and was repaid in 97 days. Payday loan customers took out an average of two loans per year. In some cases, customers likely took out two or more loans simultaneously from two or more lenders. Customers borrowing sequentially ended up paying an average of $238 to borrow $392 for 194 days. The majority of all payday loans in Colorado were at an APR over 100%. Some loans were at an APR over 200%.
  • Default occurred in 23% of all loans taken in 2016.
  • Payday loans continue to drain nearly $50 million per year from struggling Coloradans.