The real question that needs to be asked is not about Alabama payday loans but about all payday loans. Are any of them safe?
Well, that is an interesting question and one we will address along with what the Alabamas laws are and how they affect the borrowers.
Let’s first start off by reading our article on How To Use Payday Loans
Once we know how to use them properly we can take a look at the state of Alabama and how they regulate them!
Alabama Payday Loan Laws
This state has a little over 1000 payday lenders in the state and the brick and mortar (in person) loans are legal.
Online loans are also legal in this state but they have a whole different risk factor and we recommend reading up on how they work before you take any online loans out!
You can read up on these types of loans here: Are Online Payday Loans Safe?
There following lending rules in this state must be followed by the lenders and the borrowers:
- $500.00 Maximum Loan Per Borrower
- 10 to 30-day loans only
- Only allowed 1 Roll Over Of Loan
- Interest Rates = APR of 456.25%
- Service fee does not exceed 17.50%
- Must Pay Off Two Compete Loans Before The Waiting Period Between Loans Is Waved
- Can not exceed a $30.00 limit on NSF Check Collections
This state does regulate their payday lenders better than most other states while this is refreshing there are still too many pitfalls to get yourself stuck in a payday loan trap!
Are They Safe?
While no payday loans are ever really safe because they are the highest risk form of loan out there this state does make them a bit safer than most.
If you follow the following three rules we set forth about using payday loans you will be able to use them safely.
- Never take out more than you need
- Never take out more than you can pay back on the first due date
- Always pay off the loan in full on the due date
Keep in mind you will be paying a huge amount of interest for a very short-term loan but when money is tight and an emergency shows it’s ugly head a payday loan can be the only option!
We have covered the laws of the state of Alabama and we have also covered how to use a payday loan safely.
While we do not encourage using these lenders we feel it is imperative to be here and be informative in helping people stay safe and have someplace to turn to should things go south, and they can very quickly!
We hope this information helps you in deciding if this type of loan is what you are looking for.
We want to hear from you!
If you have any questions or stories to share please leave a comment below and we will get back to you as soon as possible!
Thanks for stopping by and happy lending!