Payday loans in Alabama
Payday loans are legal in Alabama. A licensed lender may lend up to $500 and charge no more than 17.5% of the amount advanced. Every figure on this page was checked against Alabama law on November 10, 2026.
- Status
- Legal
- Maximum loan
- $500
Alabama payday loan rules at a glance
- Legal status
- Legal
- Maximum loan
- $500
- Loan term
- 10 to 31 days
- Maximum fee
- 17.5% of the amount advanced
- Rollovers
- One
- Governing law
- Ala. Code §§ 5-18A-1 et seq.
- Regulator
- Alabama State Banking Department
Checked against Alabama law on November 10, 2026.
The Northlight standard
- Highest APR
- 35.99%
- Time to repay
- 3 to 36 months
- Amounts
- $100 to $5,000
Example: $1,000 over 12 months at 35.99% APR is 12 payments of $100.46, $1,205.52 in total. Rates and terms
Key points
- Payday loans are legal in Alabama and lenders must hold a state license.
- The most you can borrow on one payday loan is $500.
- Price rule: 17.5% of the amount advanced.
- Alabama State Banking Department handles licensing questions and complaints.
On this page
Are payday loans legal in Alabama?
Payday loans are legal in Alabama. A licensed lender may lend up to $500 and charge no more than 17.5% of the amount advanced.
The governing law is Ala. Code §§ 5-18A-1 et seq… Alabama State Banking Department licenses lenders and takes complaints. Check a lender’s license there before you share bank details; how to tell if a lender is legitimate lists the other checks.
Loan limits in Alabama
- Loan size: up to $500
- Loan term: 10 to 31 days
- Rollovers: One
What a payday loan costs in Alabama
State law sets the price rule: 17.5% of the amount advanced.
Federal law requires the lender to state the finance charge in dollars and the APR in your agreement. Read both before you sign, and set them beside the example further down this page.
A loan that meets the Northlight standard
Northlight works only with loans that carry an APR of 35.99% or less, fees included, and give you at least 3 months to repay. A single-payment payday loan under Alabama law does not meet that standard, whatever its fee, because it falls due in one payment within weeks.
For example, $1,000 repaid over 12 months at 35.99% APR is 12 payments of $100.46, or $1,205.52 in total. The calculator prices other amounts and terms.
If you cannot repay a loan in Alabama
Contact the lender before the due date and ask for a payment plan in writing. If a lender or collector breaks the rules, file a complaint with Alabama State Banking Department and with the CFPB. Our guide to what happens if you don’t pay covers each step.
Lower-cost options in Alabama
- Credit union payday alternative loans (PALs): $200 to $2,000 at no more than 28% APR.
- A payment plan with the landlord, utility or hospital you owe often costs nothing.
- Local assistance: dial 211 for rent, utility and food programs near you.
See all payday loan alternatives.
Free help in Alabama
- 211Free, confidential referrals to local help with rent, utilities and food. Call 211.
- USA.gov: help paying billsGovernment programs for rent, energy, phone and medical bills.
- National Foundation for Credit CounselingNonprofit credit counselors who can set up a debt management plan. Call 800-388-2227.
- CFPB complaint portalFile a federal complaint about a lender or a debt collector.
Common questions
Are payday loans legal in Alabama?
Yes. Payday loans are legal in Alabama under Ala. Code §§ 5-18A-1 et seq., and lenders need a state license.
How much can I borrow with a payday loan in Alabama?
Up to $500 on a single loan.
What does a payday loan cost in Alabama?
State law sets the price rule: 17.5% of the amount advanced. The lender must give you the finance charge in dollars and the APR in writing before you sign.
Can I roll over a payday loan in Alabama?
State rule on rollovers: One. A rollover adds a new fee without reducing what you owe.
Can I be arrested for not repaying a payday loan in Alabama?
No. Not paying a loan is a civil matter, not a crime. A lender can still sue you in civil court, so never ignore a court summons.
Where do I complain about a lender in Alabama?
Contact Alabama State Banking Department. You can also file a complaint with the Consumer Financial Protection Bureau.
Does Northlight offer payday loans in Alabama?
No. Northlight is not a lender, and the loans we work with must carry an APR of 35.99% or less and run for at least 3 months. Single-payment payday loans do not meet that standard.
See the payment before you apply
Pick an amount and a term. The calculator shows the monthly payment, the total and the cost of credit at the highest APR we allow.
Sources
Keep reading
- AlaskaPayday loans are legal in Alaska. See the loan limits, the rules lenders must follow, where to complain, and how a loan capped at 35.99% APR compares.
- WyomingPayday loans are legal in Wyoming. See the loan limits, the rules lenders must follow, where to complain, and how a loan capped at 35.99% APR compares.
- ArizonaArizona caps small loans at 36% APR, so high-cost payday loans are not offered. See what is allowed, who regulates lenders and what a loan costs.
- WisconsinPayday loans are legal in Wisconsin. See the loan limits, the rules lenders must follow, where to complain, and how a loan capped at 35.99% APR compares.
- ArkansasPayday loans are not legal in Arkansas. Learn what the law says, why online offers are risky and which lower-cost options you can use instead.
- West VirginiaPayday loans are not legal in West Virginia. Learn what the law says, why online offers are risky and which lower-cost options you can use instead.