Updated October 11, 2026. Quick answer: 45% a year by written stipulation, with 8% a year compounded annually on money after it becomes due when no rate is agreed, and criminal usury above a 45% annual percentage rate (C.R.S. 5-12-103 and 18-15-104).
Colorado promissory note at a glance
| Item | What the documents say |
|---|---|
| Maximum interest rate on a private loan | 45% a year by written stipulation, except as articles 1 to 6 of title 5 provide; knowingly charging above a 45% annual percentage rate is criminal usury, subject to the affirmative defenses and exclusions in 18-15-104 |
| Rate if the note names none | 8% a year, compounded annually (on a promissory note, for money after it becomes due) |
| Penalty for charging too much | Knowingly charging above a 45% annual percentage rate is the felony of criminal usury |
What Colorado law says about interest
Parties to a promissory note may stipulate in writing for a rate above 8 percent but not exceeding 45 percent per annum, and knowingly charging above a 45 percent annual percentage rate is the felony of criminal usury.
When there is no agreement as to rate, interest on money is 8 percent per annum compounded annually (5-12-101), and on a bill, bond or promissory note creditors are allowed 8 percent per annum compounded annually for moneys after they become due (5-12-102(2)).
Section 5-12-103 does not apply to commercial credit plans unless the instrument says it is subject to the section; compound interest may be agreed in advance.
The sources in their own words
- Interest limit: “but not exceeding forty-five percent per annum” (Colorado Revised Statutes 2023, Title 5).
- Rate when none is agreed: “the rate of eight percent per annum, compounded annually” (Colorado Revised Statutes 2023, Title 5).
- Interest limit: “commits the crime of criminal usury, which is a class 6 felony” (Colorado Revised Statutes 2023, Title 18).
- Time limit to sue: “shall be commenced within six years after the cause of action accrues” (Colorado Revised Statutes 2023, Title 13).
- Time limit to sue: “must be commenced within six years after the due date or dates” (Colorado Revised Statutes 2023, Title 4).
If you’re ready to put it in writing
This is free to browse and there is no obligation to buy anything. LawDepot builds a state-specific promissory note through a question-and-answer form.
Build a promissory note at LawDepot
LawDepot pays us a commission if you buy through this link. It costs you nothing extra. We are not a law firm and this is not legal advice. Affiliate Disclosure.
Signing the note: signature, witness, notary
Colorado’s UCC defines a promise as a written undertaking to pay money signed by the person undertaking to pay. A note is signed by the person who promises to pay.
None of the sections read for Colorado requires a witness or a notary for the note itself. A note secured by real property is a separate question; see what an intra-family mortgage requires.
How long a lender has to sue
Colorado’s enacted UCC 4-3-118 requires an action on a note payable at a definite time within six years after the due date, and 13-80-103.5 sets six years for liquidated debt.
A worked example: a $20,000 note
Suppose a relative lends you $20,000 and you sign a note for 5 years at 9% a year, paid monthly. With r = 9%/12 and n = 60 months, the level payment is principal times r divided by (1 minus (1 + r) to the power of negative n): $415.17 a month, computed here from these assumed inputs, not quoted. Over the 60 payments that is $24,910.20 in total, of which $4,910.20 is interest.
The 9% rate sits inside the Colorado limit in the table above, which is why it was chosen. The federal side of a loan between relatives is covered at family loan minimum interest rate and AFR rates by month.
A loan or a gift?
A loan that may never be repaid is taxed differently; see family loan vs gift, forgiving a family loan and gift tax by state.
What the documents do not say
- The Colorado Revised Statutes titles read are the 2023 official PDFs, and later amendments are not reflected.
- Silence on a witness or notary in the sections read is not proof that no other Colorado law requires one.
Common mistakes
- Charging more than the limit in Colorado, which the table gives as 45% by written stipulation: knowingly charging a loan finance charge above a 45% annual percentage rate is criminal usury, a class 6 felony (18-15-104). The sections read state no civil forfeiture of interest.
- Leaving the rate out: when a note names no rate, 8% a year compounded annually applies to money after it becomes due on the note (5-12-102(2)), and it is rarely what the parties meant.
- Waiting too long to enforce: Colorado allows 6 years to sue on a written note.
Related: promissory notes by state, promissory note requirements, family loan minimum interest rate, and gift tax by state.
Sources
- Colorado Revised Statutes 2023, Title 5: https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-05.pdf
- Colorado Revised Statutes 2023, Title 18: https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-18.pdf
- Colorado Revised Statutes 2023, Title 13: https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-13.pdf
- Colorado Revised Statutes 2023, Title 4: https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-04.pdf
Sources: the primary documents linked above, read on October 11, 2026. General information, not legal or tax advice. Statutes change and courts read them, so confirm anything consequential with a lawyer licensed in your state.