CASH ADVANCE MATH / ALABAMA

Payday loans in Alabama: rules, costs and cheaper options

Start with the rules. Then compare the full cost of an advance or a credit union loan before deciding.

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Alabama borrowing rules

Legal as deferred presentment services, with licensed lenders

Maximum loan: $500 per transaction and $500 in outstanding advances across lenders
Fee cap: Up to 17.5% of the amount advanced: $17.50 per $100, or $87.50 on $500. One insufficient-funds fee of up to $30 is permitted per transaction.
Loan term: 10 to 31 calendar days
Rollovers: One rollover at the same fee, for at most 2 continuous transactions. After those 2 transactions, another loan must wait until the next business day after full repayment.

The percentage applies to the cash advanced. The statewide database fee is paid by the lender and cannot be passed on to the borrower.

Regulator: Alabama State Banking Department, Bureau of Loans

Repayment options and borrower safeguards

An optional extended repayment plan: After the original term and one rollover, a lender may offer 4 equal monthly installments if you cannot repay. The statute makes this offer optional, not mandatory. The Banking Department FAQ permits plans with more than 4 payments.

Before a lawsuit: The lender must send written notice of your rights and wait 15 days before suing. An insufficient-funds check cannot lead to a criminal conviction under these rules.

Database and additional charges: Lenders must check the statewide database for each transaction. Its $2 fee has been lender-paid since January 1, 2025. No other loan fees are allowed; collection attorney fees are separately limited to 15% of the check face amount.

What the sources establish

The Code was read through the Alabama Legislature's ALISON data service. The Banking Department's statute PDF dates from 2007; ALISON showed no amendments to sections 5-18A-12 or 5-18A-13 since the 2003 Act.

Cheaper options in Alabama

Compare an app's standard delivery cost, then ask a federal credit union about a PAL. Check your eligibility and state availability first.

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Last checked Sep 30, 2026. These state rules do not change the calculator's national example.

Full researched rules and qualifications

Legal status

Legal as 'deferred presentment services' under the Alabama Deferred Presentment Services Act (Ala. Code 5-18A, Act 2003-359), licensed by the State Banking Department, Bureau of Loans. 290 licensees at 2024-12-31 (Banking Department FY2025 annual report).

Maximum loan

$500 per transaction (5-18A-12(a)). A lender may not knowingly lend to a customer whose outstanding deferred presentment transactions with all lenders exceed $500 (5-18A-13(a)).

Fees

Fee max 17.5% of the amount advanced (5-18A-12(a)); Banking Department: '$17.50 per $100.00 of the advance amount'. Max $87.50 on $500. One NSF fee per transaction (5-18A-12(d)) under Ala. Code 8-8-15, max $30. No other fees; the statewide database fee ($2.00 per transaction since 2025-01-01) is paid by the lender and may not be passed to the borrower (Banking Department FAQ). Our calculation: $17.50 on $100 for 14 days = 456.3% APR; for the 10-day minimum = 638.8%; for 31 days = 206.0%.

Term

10 to 31 calendar days (5-18A-13(c)).

Rollovers

One rollover at the same fee, so at most two continuous transactions (5-18A-12(b)). After two continuous transactions, no new loan with that customer until the next business day after the amount is repaid in full (cooling-off, 5-18A-12(b)). No redemption, extension or consolidation with the proceeds of another loan from the same or an affiliated lender beyond this (5-18A-13(n)).

Other rules and source qualifications

After the initial term and one rollover the full balance is due; if the customer cannot pay, the lender 'may offer' an extended repayment option of four equal monthly installments (5-18A-12(c)); the statute makes the offer optional, while the Banking Department FAQ calls it the Extended Payment Plan and allows more than 4 payments. Before suing, the lender must send written notice of the customer's rights and wait 15 days (5-18A-12(c)). Statewide database (Veritec, aldpp.com) in use since 2015-08-10; lenders must check eligibility for every transaction (5-18A-13(o); FY2025 annual report: 617,431 transactions and 79,438 unique customers in 2024). No criminal conviction for an NSF check; collection attorney fee max 15% of the check face (5-18A-13(h)). 2025-2026: no bill mentioning deferred presentment was filed in the 2025 or 2026 regular sessions (ALISON bill search); the last bill to lengthen terms, 2023 HB452, died in committee. An earned wage access bill (2025 SB281) was indefinitely postponed.

Sources for this state guide