South · Allowed
Payday loans in Alabama
Storefront payday lending is permitted in Alabama. State law caps what lenders can charge — the limits below are the legal ceiling, and honest lenders stay under it.
The limits below are the legal ceiling — any offer above them is being made outside the law.
The rules behind the numbers
A payday loan is a short-term, high-cost loan designed to meet immediate cash needs and is not intended for long-term financial solutions.
In practice: borrow $300 for a standard term and the finance charge is $52.5 — $352.5 repaid at the end, about 456% APR. Every compliant lender in Alabama has to fit inside that schedule.
Statute: Ala. Code § 5-18A-1 et seq.
Regulator: Alabama State Banking Department · banking.alabama.gov
Questions people ask here
How much can a payday loan cost in Alabama?
State law caps fees at 17.5% of loan amount ($17.50 per $100). On a typical $300 loan that works out to about $52.5 in finance charges — repaying $352.5 in total. A lender charging more than the cap is operating illegally.
What happens if I can't repay on time in Alabama?
This state's rules on rolling the loan over: max 1. If you can't pay, ask the lender for an extended payment plan before you renew — and call the state regulator if the plan is refused.
Are online payday lenders legal in Alabama?
Only lenders licensed in Alabama may make loans to residents at these terms — the license, not the website, decides what's legal. Out-of-state lenders offering terms above the state cap are operating outside the law.
Who regulates payday lenders in Alabama?
Complaints about a licensed lender go to the Alabama State Banking Department (banking.alabama.gov) — keep the loan agreement and every fee disclosure you were given.
307 storefront lender locations listed statewide in the 2022-02-20 public directory snapshot — each city guide carries its local list.