Yes. Payday loans are legal in Alabama, and lenders must follow Ala. Code § 5-18A-1 et seq.
Payday loan rules in Alabama at a glance
| Payday loans | Legal, from licensed lenders |
|---|---|
| Fee or rate cap | Fees: 17.5% of cash advanced (~456% APR for a 14-day loan) |
| Largest loan | $500 |
| Loan term | 10 to 31 days |
| Rollovers and renewals | 1 rollover |
| Wait between loans | 1 day |
| Extended payment plan | Required if you meet the conditions the law sets (Ala. Code § 5-18A-12(c); § 5-18A-13(g); Ala. Admin. Code r. 155-2-4-.12(2)). The conditions are listed below |
| State loan database | Yes, lenders must check it before lending (run by Veritec) |
| Returned-payment fee cap | $30 |
| Right to cancel | No right to cancel in state law |
| Arrest and criminal charges | Lenders may not threaten arrest or jail to collect |
| Lender license | Required |
| Regulator | Alabama State Banking Department |
| Statute | Ala. Code § 5-18A-1 et seq. |
Source: Ala. Code § 5-18A-1 et seq. (read the law). We last checked it against the statute on October 3, 2026. See payday loan laws in every state.
What a payday loan costs in Alabama
Under Alabama's limits, borrowing $100 for 14 days costs $17.50 in fees, so you repay $117.50. That works out to 456% APR. Your offer may differ.
| Loan | Term | Fees | Total repaid | APR |
|---|---|---|---|---|
| $100 | 14 days | $17.50 | $117.50 | 456% |
| $300 | 14 days | $52.50 | $352.50 | 456% |
| $500 | 14 days | $87.50 | $587.50 | 456% |
A payday loan is usually repaid in one payment on your next payday, so a fee that looks small is a high APR. Compare it with the APR on any other option before you sign.
If you can't repay on time
Alabama allows one rollover, and each one adds another fee. If you can't repay on time and you meet the conditions the law sets, the lender must offer an extended payment plan. The conditions are listed below. Lenders may not threaten arrest or jail to collect a payday loan in Alabama. If a payment bounces, the lender's returned-payment fee is capped at $30.
The conditions on the payment plan in Alabama (Ala. Code § 5-18A-12(c); § 5-18A-13(g); Ala. Admin. Code r. 155-2-4-.12(2)):
- Triggered after the initial loan period plus one rollover, when the full balance falls due and the customer cannot repay.
- Statute says licensee 'may offer' four equal monthly installments, but BOL rule 155-2-4-.12(2) bars filing legal claims without first offering the plan in writing at no additional cost.
- Customer must exercise the option within 15 days of the written notice.
A federal rule also protects your bank account: after two payment attempts in a row fail, the lender needs your new permission before it tries again (CFPB payday rule).
How to check a lender in Alabama
Payday lenders in Alabama need a state license. Look the lender up in the official license search before you sign. Complaints go to the Alabama State Banking Department. Lenditup does not check lender licenses for you (see how we verify).
Looking for a loan in Alabama?
A payday loan is due in one payment within weeks. If you would rather spread the cost, compare a personal installment loan first. If a payday loan is still the right fit, you can send one request and see what lenders and lending marketplaces in our network offer.
Lenditup is not a lender. Sending a request does not mean you will be approved; each lender sets its own rates and terms within Alabama law.
Payday loan questions for Alabama
01What is the most a payday lender can charge in Alabama?
02How much can I borrow with a payday loan in Alabama?
03How long can a payday loan last in Alabama?
04Can I roll over a payday loan in Alabama?
05How soon can I take out another payday loan in Alabama?
06What if I can't repay a payday loan in Alabama on time?
07How do I check that a payday lender is licensed in Alabama?
08Is Lenditup a payday lender in Alabama?
Other loan rules in Alabama
Car title loans have their own law: see title loan rules in Alabama. To compare payday rules across states, use the state payday loan law table, or read how payday loans work.