A Colorado promissory note is a type of debt agreement that establishes a borrower’s promise to repay money owed to a lender by a certain date. This arrangement often includes an interest rate added on top of the total amount owed by the borrower. In addition to the loan amount, interest rate, and date, a promissory note should include the names and addresses of both parties, how payments should be made (lump sum or installments), late fees, and collateral (if applicable).
Unlike a loan agreement, a promissory note is less extensive and does not cover the penalties that the borrower could incur if they default on their payments. However, signing a promissory note is legally binding and failure to adhere to the terms of the arrangement could result in a breach of contract lawsuit being filed by the lender.
- Interest & Usury Laws: Title 5, Articles 1-9 and Article 12
- Usury Rate Without Agreement (§ 5-12-101): Over 8%
- Usury Rate With Agreement (§ 5-12-103): Over 45%
- Usury Rate for Municipal Indebtedness (§ 5-12-104): Over 6%
- Usury Rate for Commercial Credit Plans (§ 5-12-107(2)(a)): Over 45%
- Usury Rate for Unsupervised Consumer Loan (§ 5-2-201(1)): Over 12%
- Usury Rate for Supervised Consumer Loan (§ 5-2-201(2)): Over 21% OR over 36% on $1,000 or less; 21% on $1,000-$3,000; or 15% on an amount above $3,000, whichever is greater.
- Usury Rate for Deferred Deposit/Payday Loan (§ 5-3.1-105): Over 36%
- Usury Rate for Judgment for Damages (§ 13-21-101(1)): Over 9%