Bears Lending
Alabama payday loans are governed by the Deferred Presentment Services Act, Ala. Code §5-18A, and supervised by the State Banking Department's Bureau of Loans. The Act sets the fee, the maximum, the term and — importantly — what a lender must offer when you can't pay.
1. Fee up to 17.5%, maximum $500
A licensed lender may charge up to 17.5% of the amount advanced as a fee. On a $300 loan that's $52.50, repaid within 10 to 31 days. The maximum loan is $500. There is no separate verification or database fee.
| Loan | Fee (17.5%) | Total due | APR at 14 days |
|---|---|---|---|
| $200 | $35.00 | $235.00 | 456.25% |
| $300 | $52.50 | $352.50 | 456.25% |
| $500 | $87.50 | $587.50 | 456.25% |
2. Age 19
Alabama's age of majority is 19, so every consumer credit contract — payday, title, installment — requires the borrower to be at least 19. Eighteen-year-olds can't borrow in Alabama even with a co-signer.
3. One rollover — and the better alternative
Alabama permits one rollover: the loan can be extended once for a new fee. On the $300 example, a rollover costs another $52.50 and you still owe $300.
The Act also requires lenders to offer a repayment plan. If you ask before the due date, the balance is split into installments with no additional fee. The plan is almost always cheaper than the rollover, and lenders are not required to volunteer it — you have to ask.
Rollover: pay $52.50, still owe $300. Repayment plan: pay $352.50 total over several installments, no new fee. Same loan, $52.50 difference.
4. The Alabama database
Like Florida, Alabama runs a statewide database. A lender must check it before funding and may not make a loan to a borrower with an open payday loan of $500 or more in aggregate. The database isn't a credit report and doesn't affect your score.
5. Collections and criminal liability
A defaulted payday loan is a civil debt. Lenders may not threaten criminal prosecution, may not contact you at work after being told not to, and may not charge collection fees beyond those in the agreement and the Act. A bounced-check charge is limited to the bank's actual returned-item fee.
6. Title loans are pawns in Alabama too
Vehicle title loans in Alabama are made under the Pawnshop Act: 25% per month, 30-day term, renewable, with written notice and a right to cure before repossession. They aren't covered by the payday Act, so the $500 cap and 17.5% fee don't apply.
What this means at the counter
- $300 costs $52.50 for up to 31 days at any licensed Alabama lender.
- You must be 19.
- If you can't pay, ask for the repayment plan before the due date — never take the rollover.
- Threats of arrest are illegal. Verify any lender at banking.alabama.gov.
Questions
Can I roll over an Alabama payday loan more than once?
No. One rollover is the legal maximum. After that, the balance must be paid or placed in a repayment plan.
Is there a cooling-off period?
Alabama requires a one-business-day wait after a loan is paid in full before a new one can be made.
Why is Alabama's payday fee higher than Florida's?
Each state sets its own cap. Alabama allows 17.5%; Florida allows 10% plus $4. Bears Lending charges the legal rate in each state.