Colorado Demand Promissory Note Overview
A demand promissory note in Colorado is a flexible loan agreement where the lender can request full repayment at any time. There is no fixed maturity date — the loan remains outstanding until the lender makes a formal demand. The maximum interest rate in Colorado is 12% (default).
12% default; 45% for consumer loans under $3,000. Demand notes are commonly used in Colorado for family loans, loans between friends, shareholder loans, and informal business financing where both parties want flexibility.
Regarding demand notice in Colorado: Reasonable notice; no specific statutory period. The statute of limitations for collecting on a promissory note in Colorado is 3 years (oral), 6 years (written), though the start date for demand notes can vary.
12% (default)
Usury rate cap
On Demand
No fixed maturity
3 years
Statute of limitations
30 Days
Recommended notice
Colorado Legal Requirements
Colorado has specific requirements for demand promissory notes:
Important: Colorado Usury & Demand Rules
Colorado's maximum interest rate is 12% (default). Reasonable notice; no specific statutory period. Specify a clear notice period in your note to avoid disputes.
- Written Agreement: Must be in writing and signed by the borrower
- Demand Clause: Clearly state the note is “payable on demand”
- Notice Period: Specify days borrower has to pay after written demand (30-90 days recommended)
- Compliant Interest Rate: Must not exceed Colorado's 12% (default) usury cap
- Delivery Method: Specify how demand must be delivered (certified mail recommended)
- Governing Law: Specify Colorado as the governing jurisdiction
Making a Demand in Colorado
When the lender is ready to call in the loan, they must follow proper demand procedures:
Prepare the Demand Letter
State the total amount owed (principal + accrued interest), reference the original note, and specify the deadline for payment
Send via Certified Mail
Send the demand letter by certified mail with return receipt to prove delivery under Colorado law
Wait the Notice Period
Allow the borrower the full notice period specified in the note (or a reasonable time if not specified) to arrange payment
Pursue Collection if Unpaid
Demand letter, suit in county or district court
Collection Procedures in Colorado
If the borrower fails to pay after a proper demand, the lender can pursue legal remedies in Colorado.
| Aspect | Colorado Rule |
|---|---|
| Usury Rate | 12% (default) |
| Demand Notice | Reasonable notice; no specific statutory period |
| Statute of Limitations | 3 years (oral), 6 years (written) |
| Collection Procedure | Demand letter, suit in county or district court |
Sample Colorado Demand Promissory Note
Below is a preview of our Colorado-specific demand promissory note template.
STATE OF COLORADO
DEMAND PROMISSORY NOTE
Payable on Demand — No Fixed Maturity
FOR VALUE RECEIVED, the undersigned promises to pay ON DEMAND to the order of Lender the sum of $[Amount]
LENDER:
Name: [Lender Name]
Address: [Colorado Address]
BORROWER:
Name: [Borrower Name]
Address: [Colorado Address]
TERMS
Interest: [Rate]% per annum (max 12% (default) in CO)
Payable within 30 days of written demand by Lender
Colorado Demand Promissory Note FAQ
Answers to common questions about demand promissory notes in Colorado.
Official Colorado Resources
Official resources for Colorado lending laws and court procedures.
Other Colorado Promissory Note Types
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