New Colorado Payday Bill To Open Ground For Illegal Lenders

Recently, Colorado citizens have seen a new bill, named House Bill 1351. According to this new bill APRs for Payday Loans are capped at 45%. This innovation leaves no opportunity to develop payday industry taking into account high operating expenses and a number of customers who default on those payday loans. Basically, it can be called the end of short-term loan options for those who reside in Colorado.

Authorities have decided to replace those convenient payday loans with installment loan of $500 taken out for a period of six month. But is that the alternative that would satisfy Colorado residents? Hardly can it be considered as such.  As a rule, payday loan customers turn to borrowing cash for a short term between their paychecks. They need loans for a number of simple reasons, such as to repair their car, to pay outstanding bills or take their pet to vet. Many of the borrowers cannot boast of having a perfect credit history. For such people, payday loan appears to be the best and the last option to alleviate their financial burden. But will you really want to take out a 6-month 500 payday loans, if everything you need is a bit of extra cash? That's really not the best way out.

Actually, the borrowers are being deprived of the freedom of choice, when it comes to financial issues. These innovations resulted in many customers having closed their stores and having stopped their loan business in Colorado.

Which is even worse is that such measures may open ground for illegal same day payday loans business blooming. Other states, such as for example South Carolina and Georgia, which have banned or passed loan restrictions demonstrate that this is a very negative trend. Many customers in need turn to unlicensed lenders, which trebles the number of complaints against unfair lenders. Those who pass such bills don't seem to realize that by restricting APR, they don't help forward the extinction of payday companies, they only make unregulated lenders grow in quantity. This only causes more complaints and discontent.