Alabama lending rules
Personalloaner covers 462 Census places in Alabama, which together hold an estimated 3,147,936 people. Licensed lenders set personal-loan terms here under Alabama law, and the sourced rules below reach every borrower in the state.
Key rules for borrowers in Alabama
| Rule | Detail | Source |
|---|---|---|
| Maximum legal interest rate (usury cap) | 6% per annum without a written contract; 8% per annum by written contract Source says: "except by written contract is $6 upon $100 for one year"; "the rate of interest by written contract is not to exceed $8 upon $100 for one year". (Code text retrieved from the Alabama Legislature's official Code of Alabama service.) |
Alabama Legislature — Code of Alabama 1975, § 8-8-1 as of 2026-09-16 |
| Payday lending status | Permitted — deferred presentment services licensed by the supervisor; maximum advance $500; maximum fee 17.5% of amount advanced Source says: "a maximum fee on any deferred presentment transaction not to exceed 17.5 percent of the amount advanced"; "The maximum amount that may be advanced in any deferred presentment transaction is five hundred dollars ($500)". |
Alabama State Banking Department — Deferred Presentment Services Act (Code of Alabama §§ 5-18A-1 et seq.) as of 2026-09-16 |
| Small-loan / installment lender licensing | Alabama Small Loan Act license required from the supervisor for loans under $1,500; interest capped at 3% per month on the first $200 and 2% per month on $200–$1,500 Source says: "No person shall engage in the business of lending in amounts of less than one thousand five hundred dollars ($1,500)"; "without first having obtained a license from the supervisor"; "not exceeding three percent a month on that part of the unpaid principal balance not in excess of two hundred dollars". |
Alabama State Banking Department — Alabama Small Loan Act (Code of Alabama §§ 5-18-1 et seq.) as of 2026-09-16 |
| State lending regulator | Alabama State Banking Department — Bureau of Loans (BOL) Source says: "The Bureau of Loans (hereinafter “the BOL”) was established in 1945". The BOL administers the Small Loan Act, Consumer Credit Act, Pawn Shop Act, Mortgage Brokers Licensing Act, Deferred Presentment Services Act and SAFE Act. |
Alabama State Banking Department as of 2026-09-16 |
| Parity lending rate provision (§ 8-8-1.1) | Any lender may charge the same rates as any federally or state-chartered or licensed lending institution in Alabama Source says: "may, on any loans or extensions of credit made by them, charge or impose the same rate of interest or finance charge". |
Alabama Legislature — Code of Alabama 1975, § 8-8-1.1 as of 2026-09-16 |
Places we cover in Alabama
The Census Bureau counts 462 places in Alabama, and the largest are linked below.
Common questions
How high can interest rates legally go in Alabama?
The answer turns on the product and on which statute applies to it. This page's table sets out Alabama's usury cap and licensing rules, and each row carries its publisher and a link to the primary source.
What is Alabama's position on payday lending?
Each state handles payday lending on its own: some permit it, some cap it, some prohibit it. The sourced row on this page gives Alabama's current position.
How do I know a lender is licensed in Alabama?
Consumer lenders generally need a licence issued by the state regulator identified on this page. Verify that licence with the regulator before you commit to anything.