Alabama

Payday loans are available in the state of Alabama as long as they adhere to legal guidelines. The most common form of payday loan involves writing a check to a company that holds it until your next payday. At that time, you can pay the loan back and renew it, with a hefty fee attached of course. Alabama limits the interest these institutions can charge to 17.5%. That means for every $100 you borrow, they can legally charge you $17.50 in interest. Alabama law also prohibits any one person from having more than $500 total in these types of loans. For this reason, alabama cash advance companies have to use a statewide database to make sure a customer is not exceeding this limitation.

Alabama law does not allow a person to be imprisoned for writing a bad check, so there is no threat of being sent to jail if a payday loan goes awry. The only way a person can be prosecuted is if the check was written on a closed account or fraudulently. Alabama law encourages companies to offer a payment plan to help customers get out from under payday loans by paying it off in four equal payments, but it stops short of forcing them to offer this service. Therefore, most payday loan companies do not offer the option.