What a loan can cost in Alabama
Examples at an illustrative rate, never above Alabama's cap for the amount. They are not quotes.
Representative example
- Amount borrowed
- $500
- Annual percentage rate (APR)
- 28.8%
- Repayment
- 12 monthly payments
- Payment
- $48.45
- Finance charge
- $81.40
- Total of payments
- $581.40
Example: a $500 installment loan at 28.8% APR repaid in 12 monthly payments of $48.45 costs $581.40 in total, including a finance charge of $81.40. Illustration only; your lender will disclose your actual APR, payment schedule and total cost before you accept a loan.
Representative example
- Amount borrowed
- $1,000
- Annual percentage rate (APR)
- 26.4%
- Repayment
- 12 monthly payments
- Payment
- $95.72
- Finance charge
- $148.64
- Total of payments
- $1,148.64
Example: a $1,000 installment loan at 26.4% APR repaid in 12 monthly payments of $95.72 costs $1,148.64 in total, including a finance charge of $148.64. Illustration only; your lender will disclose your actual APR, payment schedule and total cost before you accept a loan.
Resources in Alabama
Free and low-cost help in Alabama, each with its official link and the date we checked it.
Lending regulator and complaints
Alabama State Banking Department, Bureau of Loans licenses lenders in Alabama.
Check a lender's license File a complaint
banking.alabama.gov Checked September 23, 2026
Attorney general consumer protection
Takes complaints about scams and unfair debt collection.
alabamaag.gov Checked September 23, 2026
211
Help with rent, utilities, food and other urgent bills.
211connectsalabama.org Checked September 23, 2026
Legal aid
Free civil legal help if your income is low; income limits vary.
legalservicesalabama.org Checked September 23, 2026
Nonprofit credit counseling
Help with a budget or a debt management plan.
nfcc.org Checked September 23, 2026
Benefits portal
Check whether you qualify for food, cash or other benefits in Alabama.
dhr.alabama.gov Checked September 23, 2026
Federal complaints
Complaints about any lender, to the Consumer Financial Protection Bureau.
Submit a complaint to the CFPB
consumerfinance.gov Checked September 23, 2026 Available in Spanish
Cheaper options to try first
Worth checking whatever your credit: these can cost less than a high-rate loan.
- Credit union payday alternative loans (PALs). Federal credit unions may offer small loans of up to $2,000 with terms of up to 12 months and an APR no higher than 28%, under NCUA rules (12 CFR 701.21). You usually need to be a member.
- Ask your creditor for a payment plan. Utilities, hospitals and many lenders offer hardship or extended payment plans if you ask before you miss a payment.
- Credit-builder loans: a small loan held in savings while you pay it off, which can help build a payment history.
- Secured credit cards: a card backed by a deposit you make, which can help build credit when you pay on time.
The rules lenders follow in Alabama
Each rule links to its source. How we research state rules.
Allowed in Alabama: installment and personal loans, title loans and payday loans.
| Product | Status | APR cap | Amount | Term | License | Law |
|---|---|---|---|---|---|---|
| Installment and personal loans[1][2] | Allowed | 36% APR (top tier) | Up to $1,499.99 | Not set by statute | Small Loan Act license | Ala. Code Section 5-18-1 et seq.; Ala. Code Section 5-19-1 et seq. |
| Title loans[3][4][2] | AllowedHigh-cost loan | 300% APR | Not set by statute | Not set by statute | Pawnbroker license | Ala. Code Section 5-19A-1 et seq. |
| Payday loans[5][2] | AllowedHigh-cost loan | Not verified | Up to $500 | 10 days to 31 days | Deferred Presentment Provider license | Ala. Code Section 5-18A-1 et seq. |
| Verified against the statute and regulator on September 23, 2026. Laws change; confirm with the regulator before you borrow. | ||||||
Bars place each APR cap on a 0 to 400% scale; the pin marks the cap. A striped bar means the statute sets no numeric cap.
Rate, fee and license rules in Alabama
Installment and personal loans
- Rate cap
- Alabama Small Loan Act (Ala. Code Section 5-18-15(a)) caps interest on licensed loans of less than $1,500 at 3% per month on the part of the unpaid principal balance up to $200 and 2% per month on the part above $200, plus an optional account maintenance fee of up to $3 per month (5-18-15(b)). Section 5-18-18 separately permits an acquisition charge and monthly installment account handling charges on certain small loans.
- Fees
- Account maintenance fee of not more than $3 per month when scheduled monthly payments are at least $30 (Ala. Code 5-18-15(b)); Section 5-18-18 alternative charges include an acquisition charge up to 10% of principal plus a monthly handling charge scaled by loan size.
- License
- Small Loan Act license (consumer lender license) issued by the Alabama State Banking Department, Bureau of Loans.
Title loans
- Rate cap
- Title loans are regulated as pawn transactions under the Alabama Pawnshop Act (Ala. Code Section 5-19A-1 et seq.), which allows pawnbrokers to charge up to 25% per month on the principal amount.
- Fees
- Up to 25% of principal per month.
- License
- Pawnbroker license issued by the Alabama State Banking Department (title lenders are licensed and regulated as pawnbrokers).
Payday loans
- Fees
- Deferred Presentment Services Act (Ala. Code Section 5-18A-1 et seq.) caps the fee at 17.5% of the amount advanced (i.e., $17.50 per $100 borrowed) per loan term.
- License
- Deferred Presentment Provider license issued by the Alabama State Banking Department, Bureau of Loans.
Rent and jobs in Alabama
Typical rent and the jobless rate, to weigh before a loan payment.
Guides for Alabama borrowers
Check your options in Alabama
Alabama questions
Does Alabama law allow payday loans?
Alabama law allows payday loans. Source: Ala. Code Section 5-18A-1 et seq..
What is the most a lender can charge in Alabama?
By loan type in Alabama: Installment and personal loans: 36% APR (top tier). Title loans: 300% APR. Payday loans: Not verified.
Where can I file a complaint about a lender in Alabama?
You can file a complaint with Alabama State Banking Department, Bureau of Loans, and you can also submit one to the Consumer Financial Protection Bureau. Both links are under Resources in Alabama on this page.
How do I check a lender's license in Alabama?
Alabama State Banking Department, Bureau of Loans licenses lenders in Alabama. Use the license link under Resources in Alabama on this page to check a lender before you share your information.
Is there free help paying bills in Alabama?
Yes. Resources in Alabama on this page lists free help, including 211, legal aid, nonprofit credit counseling and benefits portal.
Nearby states
- MississippiAllowed See the rules
- GeorgiaAllowed 60% APR
- TennesseeAllowed 24% APR
- LouisianaAllowed Limit depends on loan size
- KentuckyAllowed 36% APR (top tier)
Sources
- banking.alabama.gov. Ala. Code Section 5-18-1 et seq.. Retrieved September 23, 2026.
- banking.alabama.gov. Alabama State Banking Department, Bureau of Loans. Retrieved September 23, 2026.
- banking.alabama.gov. Ala. Code Section 5-19A-1 et seq.. Retrieved September 23, 2026.
- Justia. law.justia.com/codes/alabama/title-5/chapter-19a. Retrieved September 23, 2026.
- banking.alabama.gov. Ala. Code Section 5-18A-1 et seq.. Retrieved September 23, 2026.
- National Low Income Housing Coalition. Out of Reach 2026: Alabama. Retrieved September 23, 2026.
- U.S. Bureau of Labor Statistics. Local Area Unemployment Statistics (LAUS), All States, Seasonally Adjusted. Retrieved September 23, 2026.
Important disclosures
APRs vary by lender and state in Alabama. Each lender sets its own rates and terms and must show you the APR before you sign.
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- Questions about a lender licensed in Alabama? Contact the Alabama State Banking Department, Bureau of Loans or file a state complaint.
- You can submit a complaint about any lender to the Consumer Financial Protection Bureau at consumerfinance.gov/complaint.