In Colorado, the legality of the interest rate charged on your $6,000 loan depends on whether it exceeds the maximum limits set by the state’s usury laws. Under Colorado Revised Statutes (C.R.S.) 18-15-104, any person who knowingly charges, takes, or receives a loan finance charge exceeding an annual percentage rate (APR) of forty-five percent commits the crime of criminal usury, which is classified as a class 6 felony. The statute does provide some affirmative defenses, such as if the excessive rate could not have been determined at the time of the loan or if it was calculated on the unpaid balance.

In your case, you were charged 20% interest over 30 days. If you annualize this interest rate, the effective APR is approximately 240% (20% multiplied by 12 months). This rate far exceeds the maximum allowable APR of 45% under Colorado law, making it likely a violation of the usury laws unless a specific exception applies.

Certain exceptions to the usury laws exist, however, allowing higher interest rates under specific circumstances. These include loans from licensed financial institutions, credit cards, loans secured by real property, business loans, pawn loans, and other loans regulated under specific statutes.

Charging 20% interest over 30 days, resulting in an effective APR of 240%, violates Colorado’s usury laws unless a specific exception under another statute applies. I would suggest talking to one of our attorneys to discuss your best course of action and options. you can call us at (303) 688-0944 or find more ways to contact us here.