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States Alabama Payday Loans

Payday Loans in Alabama

Page last reviewed: October 28, 2026 · Reviewed for accuracy by Peter Kizza

Yes, payday loans are legal in Alabama. A licensed lender can advance up to $500 for 10 to 31 days and charge no more than 17.5% of the advance, so a $300 loan costs at most $52.50.

Check Your Options
Borrow Up to $500 in open payday loans, across all lenders
Example $300 for 14 days: repay $352.50 at the maximum (~456% APR)
Fee cap 17.5% of the advance; one $30 fee if a payment bounces
Term 10 to 31 days, with one renewal at the same fee
You need ID, proof of income, a checking account and room under the $500 limit
See the Fee on Each Amount Can't Repay?

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Alabama's 17.5% Fee on $100 to $500

LoanMax feeAPR, 14 days
$100$17.50~456%
$200$35.00~456%
$300$52.50~456%
$400$70.00~456%
$500$87.50~456%

Worked out from Alabama law, not offers from lenders in our network; a lender can charge less.

The fee is a flat share of what you borrow, so the APR depends on the term: $300 kept the full 31 days is about 206% APR. A renewal charges the full fee again, so renewing $300 once costs $105.00 in fees. The Banking Department's database put the average 2024 loan at $389.51, with a $67.99 fee over 20.6 days (about 309% APR).

Need more than $500, or monthly payments? See small installment loans on the Alabama loans overview.

A $500 Ceiling Across Every Lender, Checked in a Database

Alabama limits your total payday debt, not the number of loans: no licensed lender can make a loan that takes your open payday loans above $500, and each checks the statewide database first.

  • Lenders pay the database $2.00 per loan or renewal since January 1, 2025, and can't pass that fee on to you.
  • Database wrong about you? Call its operator, Veritec, at 1-877-238-2262, then write to the Banking Department.
  • It logged 617,431 payday transactions in 2024, when the Department counted 290 active payday licensees.

One Renewal, Then the Four-Payment Option

  • One renewal at most. A lender can renew your loan once, at the same fee. After that, the whole balance is due.
  • A free plan before any lawsuit. The lender may let you repay in four equal monthly installments, and it must offer that plan in writing, at no extra cost, before it sues.
  • 15 days to respond. A lender can't sue until it has sent written notice of your rights and 15 days have passed. If it sues, it can add court costs and an attorney's fee of up to 15% of the check.
  • A one-day pause. After a loan and its renewal, that lender can't lend to you again until the business day after you repay in full.

Your Three Steps to an Alabama Payday Request

  1. Add up your open payday loans: a new one can't take the total past $500.
  2. Submit one request through LendUp. Lenders in our network review it, and any offer shows the APR, payments and total cost before you sign.
  3. Check the agreement: due in 10 to 31 days, a fee of no more than 17.5%, and the four-payment plan.
Check Your Options

Is the Lender Licensed for Deferred Presentment?

Official lookup tool NMLS Consumer Access
  1. Search by the lender's legal name or NMLS ID; Alabama payday licenses are moving onto NMLS from September 1 to December 31, 2026.
  2. Look for an Alabama Deferred Presentment license, which covers online and storefront lenders alike.
  3. Not there? Call the Banking Department at (334) 242-3452 or email Consumer.Lending@banking.alabama.gov; its own licensee search showed as temporarily unavailable on October 28, 2026.

Banks and credit unions don't need this license; for anyone else, payday lending without one is a crime in Alabama.

  • No criminal threats. A lender can't threaten prosecution over a bounced check unless the account was closed before the day of the loan.
  • One bad-check fee. Up to $30, once per loan, and only after the check has been presented to your bank. No other fees are allowed.

Common Questions

Are payday loans legal in Alabama?

Yes. The State Banking Department licenses online and storefront payday lenders under the Deferred Presentment Services Act. Each loan is limited to $500 and a fee of 17.5% of the advance.

How can I borrow $500 in Alabama?

$500 is the most a payday lender can advance, and only if you have no other payday loans open. At the maximum fee it costs $87.50 for 10 to 31 days.

How much does a $400 payday loan cost in Alabama?

No more than $70.00, about 456% APR over 14 days. Renewing it once adds another $70.00.

How many payday loans can I have at once in Alabama?

As many as fit under $500: no licensed lender can make a loan that takes your open payday loans, from all lenders, past that total.

Can you go to jail for not paying a payday loan in Alabama?

Not for a check that bounces for lack of funds. Only a check written on an account closed before the loan day can lead to prosecution.

What if I can't repay my Alabama payday loan?

After one renewal the full balance is due. Before suing, the lender must offer in writing four equal monthly payments at no extra cost, and give you 15 days to respond.

Official Sources

General information, not legal advice. Facts on this page were checked against these sources on October 28, 2026.

← Alabama loan rules