Loans in Alabama: payday, personal & title loan laws (2026)

Payday loans ("deferred presentment") are legal in Alabama from lenders licensed by the State Banking Department under the Deferred Presentment Services Act, Ala. Code Title 5, Chapter 18A.

$500 per loan.

The fee may not exceed 17.5% of the amount advanced ($17.50 per $100). No other fees are allowed except those the Act authorizes.

Alabama has no statute that names "title loans." Lenders that hold car titles generally operate as pawnshops ("title pawns") licensed under the Alabama Pawnshop Act, which allows a charge of up to 25% of the principal per month.

Pawnshop charge of up to 25% of the principal per month. Charges above that make the transaction void.

Tiered caps. Loans under $1,500 (Small Loan Act): 3%/month on the first $200, 2%/month above that, or an alternative fee schedule. Loans under $2,000 (Consumer Credit Act): $15 per $100 per year on the first $750, $10 per $100 on the rest. Loans of $2,000 and up fall under a different statute.

Yes. A license is required to make consumer loans to Alabama residents, even without an Alabama office. A Small Loan Act license is required to lend under $1,500 at more than the general legal rate.