Alabama Payday Loans Online
In Alabama, payday loans can be a helpful financial resource for people who need money quickly and don’t have any other options.
Payday loans are short-term loans designed to help people cover unexpected expenses or emergencies. The loan amount is typically small and the repayment terms are short, making them a popular choice for people who need cash fast.
Each state creates its own set of rules and regulations that lenders must follow for this type of transaction. Let’s take a quick look at their requirements to help you decide if an Alabama payday loan is right for you.
Are Payday Loans Legal in Alabama?
Yes, you can legally get a payday loan in Alabama.
However, the state’s laws are designed to protect consumers from predatory lenders and ensure they can repay their loans without getting into further financial trouble. To meet that goal, the state placed some restrictions on how much money you can borrow and the terms of your loan.
Alabama Payday Loan Laws
The Alabama Deferred Presentment Services Act governs all payday loan activity in this state. Deferred presentment is when you borrow money for a service fee.
While the state’s law provides many details about the licensing requirements for lenders, key elements talk about how your loan can work. We’ll look at those below, so you understand what you’re legally getting into before you sign on the dotted line.
How Much Can You Borrow for a Payday Loan in Alabama?
The maximum amount you can borrow from a payday lender in Alabama is $500. While this might not seem like a lot of money, it’s a standard limit. Nearly one-third of all states in the country have this same borrowing limit.
A payday loan isn’t right for you if you need more money. Instead, you’ll have to look at another type of loan, such as a personal loan.
How Long Do You Have to Repay Your Payday Loan in Alabama?
According to Alabama state law, your payday loan’s due date must be 10 to 31 days after the contract’s date.
If you don’t pay your loan on time, you can roll it over once. A rollover allows you to extend the life of your loan for another 10 to 31 days. However, you’ll need to pay another finance charge when you extend your loan. The fee is likely the same amount as your first payday loan.
After one rollover, the state law allows you to enter into an extended payment period with no additional fees. The extended payment period must be broken into four monthly payments, meaning you’d have four months to repay your loan.
What Are the Fees Associated with Payday Loans in Alabama?
The finance charge for payday loans in Alabama is capped at 17.5% of the total amount you borrow. So, if you take out a $100 loan, your finance charge would be no more than $17.50. If you took out the maximum of $500, your total fees can’t exceed $87.50.
If you calculate your loan’s fee as an annual percentage rate (APR), you’d see that it’s much higher than the interest rate on other types of loans. For example, if you borrowed $100 for two weeks and paid a $15 fee, your APR would be 391%.
Lenders can also charge you a one-time $30 non-sufficient funds (NSF) fee if your check bounces.
What Are the Restrictions on Lending Practices in Alabama?
To help you avoid financial pitfalls, Alabama state law limits how often you can take out a payday loan.
In this state, lenders aren’t supposed to issue you a payday loan if they know you have a deferred presentment transaction with any lender that’d take you over the $500 limit. In other words, you can have multiple payday loans, but the total amount can’t exceed $500.
What Else Do You Need to Know About Payday Loans in Alabama?
When taking out a payday loan, always ensure the state licenses the lender. You can check with the Alabama State Banking Department to confirm that your lender is appropriately licensed and in good standing.
State law requires specific language to be included in the loan contract to protect you. For example, here are some of the things you should see in your agreement:
- In capital letters, right above your signature, the contract should say: “Notice: Fees for deferred presentment transactions may be significantly higher than for other types of loans.”
- All fees, penalties, and charges you may encounter if you can’t repay your loan on time should be clearly listed.
- The contract should also list the due date, the amount of money being borrowed, the finance charge, and any other relevant information about your loan agreement.
If a lender doesn’t include all this information or tries to hide it in complex language, that’s a red flag. You’re probably better off finding another source for your loan.
Payday Depot only works with lenders who abide by Alabama’s state laws. You never have to worry about dealing with unsavory characters who could put you in a financial bind.
Alabama Payday Loans Can Get You Fast Cash
Payday loans can be a quick and easy way to get the cash you need, but they’re not right for everyone. So before you take out a loan, ensure you understand the terms and conditions. And always remember to borrow responsibly. If you’re ready to get a payday loan, apply today with Payday Depot.