What Is the Maximum Loan Amount in Alabama?
Under Alabama regulations regarding payday loans, the loan amount cannot be higher than $500.
How Are The Loan Costs Regulated in Alabama?
For every $100, all the fees combined should be no more than 17.50%. And the APR is 456.25% (“Typical APR based on the average rate for a $300 loan advertised by largest payday chains or as determined by the state regulator, where applicable.” – Center for Responsible Lending 2019)
How Is the Loan Cost Calculated in Alabama?
If the loan amount is $200 and the term is 14 days:
Loan cost: $200 * 456.25% * (14 / 365) = $35
Total amount to return: $200 + $35 = $235
What Is The Maximum Loan Term in Alabama?
The relevant statute in Alabama sets out that the term should be “not less than 10 days and not more than 31 days” (Code §§ 5-18A-1 et seq.) and allows one payday loan at a time at a given location
According to rule changes by the Consumer Financial Protection Bureau, starting from July 2020, lenders are not obligated to check whether a borrower is able to pay back a loan. Think carefully before you decide to borrow a payday loan, and manage your money spending reasonably to avoid debt trap.
- One rollover is allowed when the borrower fails to repay the loan.
- There is a cooling-off period of one business day after two consecutive payday loan repayments.
- There are some restrictions on collection if a loan is delayed or partially repaid. There will be a non-sufficient fund and its maximum amount is $30.
- Collectors are generally not allowed to take criminal actions against borrowers. But in some cases they are permissible, such as when the repayment check is returned because the account is closed.
For more information about Alabama payday lending laws and regulations, check out the website of Alabama State Banking Department. This is the regulatory body you can seek help from when you have any questions about small cash loans or want to file a complaint against a lender.