Payday Loans in Alabama, Mobile
About the payday loan and cash advance industry in Alabama
If you are planning to apply for payday loans in Mobile Alabama or other cities in Alabama, you need to make sure that you understand the laws and limitations surrounding these types of deferred deposit arrangements. All businesses that issue Alabama payday loans and cash advances must comply with state laws and regulations or they risk being closed down or fined by the state.
Every state has its own legislation regarding cash advances and payday loans, and it's important for any borrower to review the loan agreement in detail so that they understand the loan terms, all fees associated with the loan, and the potential interest payments they will be making. You need to work with a licensed lender or agent, and seek out a loan that offers the lowest interest rates - especially if you know you will not be able to pay the loan back by your next paycheck date.
Laws Governing Alabama Payday Loans
The following rules and laws apply to all businesses who issue payday loans in Mobile , cash advances in Alabama and various types of Alabama payday loans:
The Arizona state legislature passed a law on June 30, 2010 that put many lenders who provided payday loans in Arizona out of business. Lenders who do not reduce their interest rates to less than 36 percent are breaking the law. You will find that many loan providers throughout the state are offering loans and cash advances well under this limit. However, this doesn’t mean that these loans are still your best option when you need cash quickly. Most borrowers still end up spending a significant amount of money on interest charges on this type of loan, especially if they carry the loan balance for several months.
- Maximum loan amount cannot exceed $500
- The loan term cannot be longer than 31 days, and may range between 10 to 31 days
- The maximum finance charges and fees on Alabama payday loans cannot exceed 17.50%, and 3% per month after a loan default
- The finance charges for 14-day $100 loans cannot exceed $17.50
- The APR for a 14-day $100 loan cannot exceed 456.25%
All borrowers who take out payday loans in Alabama are limited to just one loan at a time, and are permitted one rollover loan.
Under the Alabama Deferred Presentment Services Act, Title 5, Chapter 18A, if you apply for Alabama payday loans or Alabama cash advances and end up defaulting on the loan, the lender can offer you an extended repayment option of four equal monthly installments of the outstanding balance.
Applying for Alabama Cash Advances
If you are considering applying for a payday loan or ash advance in Alabama, find out if the lender is part of the Borrow Smart Alabama program. This program was introduced by the Alabama Council for Fair Lending, a trade association of Alabama-based payday and title loan lenders, to encourage fair lending practices among all loan providers. All members of the Council for Fair Lending abide by a strict code of ethics and have a Borrow Smart seal on their doors. Working with a lender who is part of this program may help to reduce the risk of being scammed and paying exorbitant interest rates on your payday loan or cash advance.
If you have questions about Alabama payday loans or want to see if you are working with a legitimate lender when applying for Alabama cash advances and loans, you can contact the Alabama Banking Department located in Montgomery, Alabama. The State of Alabama Banking Department also maintains a database of registered licensees.
The contact information is as follows:
Alabama Banking Department
P.O. Box 4600
Montgomery, AL 36103