Loan Options in Alabama

Alabama allows both payday loans and installment loans, but each type follows different rules. Payday loans - called "deferred presentment transactions" in state law - are capped at $500 and must be repaid within 31 days under the Deferred Presentment Services Act. Installment loans follow the Small Loan Act and the Alabama Mini-Code, which let you borrow larger amounts over longer periods but with their own fee structures.

Check the Alabama Payday Loans page if you need short-term cash or the Alabama Installment Loans page for longer repayment terms. For fee comparisons and APR ranges, see Alabama Rates & Fees. If you'd rather avoid high-cost borrowing, start with alternatives available in Alabama.

Alabama law includes several safeguards for small-dollar borrowing. The protections below come from state statute and guidance published by the Alabama State Banking Department.

• Every lender must hold a state license - Payday lenders and small-loan lenders can't operate in Alabama without a license from the Alabama State Banking Department. Licensed lenders face state exams, and you have a clear process to file complaints if something goes wrong. You can check a lender's status through the Department's licensee search tool.
• Payday loans can't exceed $500 - The Deferred Presentment Services Act caps each payday transaction at $500. That limits how much you can owe on a single loan.
• You can only have one payday loan open at a time - Alabama prohibits you from taking out more than one deferred presentment transaction at once. Lenders must check a centralized state database before approving you, so they'll see if you already have a loan open.
• Lenders must give you a written agreement before you sign - Your lender has to spell out the finance charge, the total amount you'll repay, and the due date in writing. That gives you a chance to compare costs or walk away if the terms don't work for you.

Before you share personal or financial information with any lender, review the LendUp scams and safety guide and verify the lender's license through the Alabama State Banking Department licensee search.