Alabama’s Consumer Credit Act – enforced by the State Banking Department – is designed to control the cost of installment loans and protect residents of Alabama. The act limits the annual interest rate lenders can charge. It works like this: $15 per $100 on the first $750 you borrow and $10 per $100 for amounts exceeding $750 but less than $2,000. If you happen to default on the loan, you’re allowed a 10-day grace period to come up with the funds. After 10 days, the lender can impose a late payment fee of $18 or 5% of the amount in default. However, the late payment fee cannot exceed $100.
For loans of $300,000 or more, the maximum repayment term is 36 months and 15 days. For loans less than $300,000, the maximum repayment term is 25 months and 15 days.
For smaller loans, lenders must abide by Alabama’s Small Loan Act. The legislation limits interest charges to 3% per month for loans less than $200 and 2% per month for loans in between $200 to $1,000. Similarly, late payment fees cannot exceed $18 or 5% of the amount in default, but the maximum repayment term is 12 months.
When breaking down both documents, we found some overlap between the two statues. It isn’t entirely clear which act loans in the $751 to $1,000 range must abide by. Thus, before taking out an installment loan, make sure you ask the lender which regulation the loan falls under.
Best Bad Credit Loans in Alabama 2020
BadCreditLoans Licensed in Alabama
Not a direct lender
CashUSA Licensed in Alabama
Not a direct lender
PersonalLoans Licensed in Alabama
Not a direct lender
If you have problem with getting a loan, please read our complete guide on bad credit loans.
Best Personal Loans for Good Credit in Alabama 2020
To find the best loan in Alabama – regardless of your credit score – check out our list of recommended lenders.
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Payday Loan Laws in Alabama 2020
Maximum Loan Amount: $500
Minimum Loan Term: 10 days
Maximum Loan Term: 31 days
Maximum Fee: 17.5% for every $100 borrowed
Maximum APR: 456.25%
Rollovers: 1 rollover per loan
Loan Limit: You must wait one business day after repaying two consecutive loans
Payday loans are legal in Alabama, however state law limits borrowing amounts to $500 and caps APRs at just over 456%. You’re allowed one rollover per loan, but after repaying your second consecutive payday loan, you must wait at least one business before submitting another application. As well, lenders are allowed to charge a $30 non-sufficient funds fee.
Payday lenders are licensed under Alabama’s Deferred Presentment Services Act, Section-5-18A-1. To remain in compliance, all lenders must have a current license and disclose all material information – including interest and fees – before a loan is officially processed. They’re also required to pay an annual license fee of $500 for each branch, office or place of business that the lender operates.
Payday Loan Laws in Alabama by Country
ElitePersonalFinance analysis of payday loan laws by countries in the State of Alabama.
We haven’t found a significant difference between the payday loan laws in Alabama. If you are with bad credit, here are the laws in Alabama by country.
|City||Amount Allowed||APR Allowed||Status|
|Mount Olive CDP||$500||456%||Legal|
|West End-Cobb Town||$500||456%||Legal|
What if I Don’t Qualify for a Loan?
If you’re struggling to obtain a loan, there are other ways to make money and bridge the gap. Today’s digital economy offers plenty of ways to earn extra cash and keep your finances above water. Some options include: working as an Uber driver, filling out paid surveys or freelancing online. Whatever your preference, you can find helpful tips in our money making guide.
Car Title Loans in Alabama 2020
Car title loans are also legal in Alabama.
But before choosing a lender, make sure the company is licensed in the state. Like payday lenders, car title lenders are also required to pay an annual fee to maintain their license.
In Alabama, there are no limits on the amount you can borrow and APRs can reach as high as 300%. But because car title lenders are subject to Alabama’s Pawn Shop Act, loans have a maximum 30-day repayment period and interest rates are capped at 25% per month.
What separates Alabama from other U.S. states is its repossession laws. If you default on the loan, a 30-day rollover begins. Here, you’re charged additional fees and interest, which is added on to your original loan. If you’re still in default after the 30-day extension, the lender can repossess your car. But after the repossession and sale, Alabama state law allows lenders to keep any surplus profits from the transaction. For example, if you borrow $2,000 and your car is repossessed and sold for $3,500, the lender is legally allowed to keep the entire $3,500. Other U.S. states require the lender to return the $1,500 excess.
Alternative Payday Loans in Alabama
If you don’t qualify for a personal loan, alternative payday loans are the next best thing. While their APRs are much higher than personal loans – ranging from 35.99% to roughly 200% – they’re a much cheaper option than traditional payday loans.
OppLoans is a prime example. The company’s APRs range from 99% to 199%, but the lender is licensed in Alabama and complies with all applicable laws. Its license was granted by the State Banking Department .
For more information on how alternative lenders can help when others can’t, see our detailed guide.
Best Auto Loans for Bad Credit in Alabama 2020
SuperMoney - Compare Loans to Buy Car
SuperMoney - Compare Loans to Refinance Car
Auto Credit Express
Best Auto Loans for Good Credit in Alabama 2020
SuperMoney - Compare Loans to Buy Car
SuperMoney - Compare Loans to Refinance Car
Bank Of America
Credit Unions in Alabama
|Redstone Federal Credit Union||9.92% – 18%||$5,000|
|America’s First Federal Credit Union||10,80% – 18%||Varies|
|MAX Credit Union||8.69% – 18%||Varies|
Redstone Federal Credit Union
Redstone Signature Loans allow you to borrow up to $5,000 and have fixed APRs that range from 10.25% to 18%. If you opt for a variable rate though, you can receive an APR as low as 9.92%. Loans are unsecured, so no collateral is required. As well, Redstone offers a secured loan option where you use your savings account, certificate of deposit (CD) or annuity as collateral for the loan. By putting up collateral, you’re able to decrease your APR and still earn dividends on your collateral balance. Keep in mind though, you need to be a member. To qualify, you must open a Redstone Savings Account and maintain a minimum balance for $5.
Redstone personal loans are available at 20 locations across Alabama and the lender has branches in Huntsville, Hartselle, Arab, Guntersville as well as many others.
America’s First Federal Credit Union
While loan amounts vary by borrower, America’s First offers extremely competitive APRs. Personal loans have fixed APRs that range from 10.80% to 18%. You can also secure your loan and lower your APR. Like Redstone, you need to be a member to qualify. However, you only need to live, work, worship or attend school in one of the following counties:
- Mobile and Talladega (certain areas, not all)
America’s first also operates 19 branches across Alabama with locations in Bessemer, Cullman, Birmingham, Gardendale, as well as many others.
MAX Credit Union
Offering unsecured loans that start at $1,000, MAX has APRs that range from 8.69% to 18%. You can also opt for a secured loan with APRs as low as 2% above your CD dividend rate.
Currently, MAX has 23 branches and ATM locations across Alabama with services in Auburn, Montgomery, Millbrook, Opelika and others.
All Licensed Credit Unions in Alabama
|REDSTONE FEDERAL CREDIT UNION||Huntsville||$3,188.43||342640|
|AMERICA’S FIRST FEDERAL CREDIT UNION||Birmingham||$1,207.49||113174|
|MAX CREDIT UNION||Montgomery||$913.54||109921|
|ARMY AVIATION CENTER FEDERAL CREDIT UNION||Daleville||$1,033.24||105819|
|LISTERHILL EMPLOYEE’S CREDIT UNION||Sheffield||$540.80||69855|
|FAMILY SECURITY CREDIT UNION||Decatur||$462.04||67296|
|APCO EMPLOYEES CREDIT UNION||Birmingham||$2,129.51||63784|
|FAMILY SAVINGS FEDERAL CREDIT UNION||Gadsden||$281.04||58649|
|ALABAMA ONE CREDIT UNION||Tuscaloosa||$598.14||56986|
|ALABAMA TELCO CREDIT UNION||Birmingham||$573.11||54106|
|ALABAMA CREDIT UNION||Tuscaloosa||$479.31||46346|
|LEGACY COMMUNITY FEDERAL CREDIT UNION||Birmingham||$387.61||42358|
|COMMUNITY CREDIT UNION||Gadsden||$238.27||39765|
|MUTUAL SAVINGS CREDIT UNION||Birmingham||$161.29||37143|
|NEW HORIZONS CREDIT UNION||Mobile||$187.86||32699|
|AOD FEDERAL CREDIT UNION||Bynum||$228.91||30372|
|GUARDIAN CREDIT UNION||Montgomery||$212.08||30310|
|ALABAMA STATE EMPLOYEES CREDIT UNION||Montgomery||$195.37||27221|
|ALABAMA CENTRAL CREDIT UNION||Birmingham||$124.56||24627|
|COOSA PINES FEDERAL CREDIT UNION||Childersburg||$210.14||20608|
|FORT MCCLELLAN CREDIT UNION||Anniston||$167.03||20572|
|ALABAMA TEACHERS CREDIT UNION||Gadsden||$213.84||19482|
|AUBURN UNIVERSITY FEDERAL CREDIT UNION||Auburn||$134.10||17496|
|TVA CREDIT UNION||Muscle Shoals||$268.40||17474|
|FIRST EDUCATORS CREDIT UNION||Hoover||$117.23||16451|
|FIVE STAR CREDIT UNION||Dothan||$183.53||16137|
|MOBILE EDUCATORS CREDIT UNION||Mobile||$69.40||13617|
|ECO CREDIT UNION||Birmingham||$113.56||13591|
|NORTH ALABAMA EDUCATORS CREDIT UNION||Huntsville||$79.37||11580|
|SECURE FIRST CREDIT UNION||Birmingham||$46.72||10667|
|HERITAGE SOUTH CREDIT UNION||Sylacauga||$78.46||9651|
|UNIVERSITY OF SOUTH ALABAMA FEDERAL CREDIT UNION||Mobile||$30.24||8987|
|FOUR SEASONS FEDERAL CREDIT UNION||Opelika||$45.17||8825|
|JEFFERSON COUNTY EMPLOYEES CREDIT UNION||Birmingham||$65.54||8484|
|TUSCALOOSA TEACHERS CREDIT UNION||Tuscaloosa||$106.63||8463|
|ACIPCO FEDERAL CREDIT UNION||Birmingham||$134.82||7360|
|RIVERDALE CREDIT UNION||Selma||$48.82||7345|
|RAILROAD FEDERAL CREDIT UNION||Irondale||$107.40||6809|
|VALLEY CREDIT UNION||Tuscumbia||$60.48||6426|
|NAHEOLA CREDIT UNION||Pennington||$72.71||6109|
|DCH CREDIT UNION||Tuscaloosa||$32.45||5998|
|IAM COMMUNITY FEDERAL CREDIT UNION||Daleville||$37.44||5945|
|TUSCALOOSA CREDIT UNION||Tuscaloosa||$53.50||5761|
|WIREGRASS FEDERAL CREDIT UNION||Dothan||$39.33||5751|
|TUSCALOOSA V A FEDERAL CREDIT UNION||Tuscaloosa||$45.60||5562|
|GULF COAST FEDERAL CREDIT UNION||Mobile||$29.15||5255|
|CRAIG CREDIT UNION||Selma||$10.85||5137|
|TRI-RIVERS FEDERAL CREDIT UNION (TRFCU)||Montgomery||$18.45||5058|
|LANDMARK CREDIT UNION||Fairfield||$55.20||4832|
|THE INFIRMARY FEDERAL CREDIT UNION||Mobile||$14.00||4764|
|WOLVERINE CREDIT UNION||Decatur||$22.80||4743|
|ROCKET CITY FEDERAL CREDIT UNION||Huntsville||$39.00||4540|
|FLORENCE FEDERAL CREDIT UNION||Florence||$45.88||4393|
|EAST ALABAMA COMMUNITY FEDERAL CREDIT UNION (EAMCFCU)||Opelika||$10.19||4198|
|CHATTAHOOCHEE FEDERAL CREDIT UNION||Adamsville||$14.07||3785|
|ALABAMA RURAL ELECTRIC FEDERAL CREDIT UNION||Montgomery||$27.34||3658|
|SOCIAL SECURITY CREDIT UNION||Birmingham||$27.02||3634|
|BALDWIN COUNTY FEDERAL CREDIT UNION||Bay Minette||$18.21||3451|
|CHAMPION COMMUNITY CREDIT UNION||Courtland||$50.33||3130|
|AZALEA CITY CREDIT UNION||Mobile||$19.07||2954|
|MILESTONE CREDIT UNION||Fultondale||$20.58||2928|
|CITY CREDIT UNION||Tuscaloosa||$14.42||2726|
|SHORELINE CREDIT UNION||Mobile||$7.82||2673|
|LAUDERDALE COUNTY TEACHERS CREDIT UNION||Florence||$29.41||2521|
|ENERGEN CREDIT UNION||Birmingham||$20.12||2463|
|ELECTRICAL WORKERS NO 558 FEDERAL CREDIT UNION||Sheffield||$20.21||2446|
|OPP-MICOLAS CREDIT UNION||Opp||$12.97||2263|
|TUSKEGEE FEDERAL CREDIT UNION||Tuskegee||$5.01||2240|
|PIKE TEACHERS CREDIT UNION||Troy||$7.90||2229|
|BREWTON MILL FEDERAL CREDIT UNION||Brewton||$17.93||2018|
|ALLIED CREDIT UNION||Jackson||$13.22||2002|
|MCINTOSH CHEMICAL FEDERAL CREDIT UNION||Mcintosh||$17.95||1999|
|ANG FEDERAL CREDIT UNION||Birmingham||$19.55||1931|
|COVINGTON SCHOOLS FEDERAL CREDIT UNION||Andalusia||$16.64||1856|
|FEDMONT FEDERAL CREDIT UNION||Montgomery||$11.59||1850|
|STEVENSON FEDERAL CREDIT UNION||Stevenson||$16.02||1834|
|HEALTH CREDIT UNION||Birmingham||$20.77||1831|
|CITY OF B’HAM GENERAL EMPLOYEES CREDIT UNION||Birmingham||$5.75||1797|
|RAILWAY EMPLOYEES CREDIT UNION||Muscle Shoals||$16.87||1752|
|EBSCO FEDERAL CREDIT UNION||Birmingham||$13.34||1750|
|MONTGOMERY VA FEDERAL CREDIT UNION||Montgomery||$7.74||1748|
|BIRMINGHAM POLICE CREDIT UNION||Birmingham||$5.40||1699|
|TUSCALOOSA COUNTY CREDIT UNION||Tuscaloosa||$8.62||1651|
|MEAD COATED BOARD FEDERAL CREDIT UNION||Phenix City||$44.86||1574|
|MOBILE POSTAL CREDIT UNION||Mobile||$10.81||1530|
|ALABAMA RIVER CREDIT UNION||Monroeville||$14.15||1488|
|FEDERAL EMPLOYEES CREDIT UNION||Birmingham||$12.35||1488|
|PHENIX PRIDE FEDERAL CREDIT UNION (PPFCU)||Phenix City||$5.03||1381|
|L&N EMPLOYEES CREDIT UNION||Birmingham||$10.73||1343|
|MONROE EDUCATION EMPLOYEES FEDERAL CREDIT UNION||Monroeville||$4.31||1302|
|PEOPLE’S FIRST FEDERAL CREDIT UNION||Tarrant||$5.74||1200|
|NORTHEAST ALABAMA POSTAL FEDERAL CREDIT UNION||Anniston||$14.41||1180|
|MOBILE GOVERNMENT EMP. CREDIT UNION||Mobile||$22.18||1152|
|ANDALUSIA MILLS EMPLOYEES CREDIT AS FEDERAL CREDIT UNION||Andalusia||$2.76||1082|
|SYCAMORE FEDERAL CREDIT UNION||Sycamore||$10.81||1078|
|O’NEAL CREDIT UNION||Birmingham||$2.66||1074|
|MARVEL CITY FEDERAL CREDIT UNION||Bessemer||$7.66||1026|
|SIXTH AVENUE BAPTIST FEDERAL CREDIT UNION||Birmingham||$4.38||989|
|COUNCILL FEDERAL CREDIT UNION||Huntsville||$2.95||944|
|N.E.A.R.M.C. EMPLOYEES FEDERAL CREDIT UNION||Anniston||$3.25||941|
|BLUE FLAME CREDIT UNION||Mobile||$7.89||907|
|PROGRESSIVE FEDERAL CREDIT UNION||Mobile||$6.19||894|
|DEGUSSA EMPLOYEES FEDERAL CREDIT UNION||Theodore||$5.69||871|
|NEW PILGRIM FEDERAL CREDIT UNION||Birmingham||$1.53||853|
|FIREMAN’S CREDIT UNION||Birmingham||$3.91||838|
|ALABAMA POSTAL CREDIT UNION||Birmingham||$6.80||811|
|BRASSIES CREDIT UNION||Anniston||$8.26||749|
|TVH FEDERAL CREDIT UNION||Tuskegee||$4.43||732|
|CLARKE EDUCATORS FEDERAL CREDIT UNION||Auburn||$2.72||729|
|DEMOPOLIS FEDERAL CREDIT UNION||Demopolis||$0.54||672|
|U S PIPE BESSEMER EMPLOYEES FEDERAL CREDIT UNION||Bessemer||$3.06||586|
|FOGCE FEDERAL CREDIT UNION||Eutaw||$1.19||570|
|NUCOR EMPLOYEES FEDERAL CREDIT UNION||Fort Payne||$3.48||450|
|DIXIE CRAFT EMPLOYEES CREDIT UNION||Goodwater||$2.72||441|
|CHEMCO CREDIT UNION||Mcintosh||$4.63||418|
|NORTH ALABAMA PAPERMAKERS FEDERAL CREDIT UNION||Stevenson||$1.90||411|
|S R I EMPLOYEES FEDERAL CREDIT UNION||Birmingham||$6.91||409|
|POSTAL EMPLOYEES CREDIT UNION||Huntsville||$3.23||384|
|NRS COMMUNITY DEVELOPMENT FEDERAL CREDIT UNION||Birmingham||$0.98||359|
|CHEM FAMILY CREDIT UNION||Anniston||$6.33||323|
|TUSCUMBIA FEDERAL CREDIT UNION||Tuscumbia||$1.44||287|
|ST. JOHNS AME BIRMINGHAM FEDERAL CREDIT UNION||Birmingham||$0.05||204|
|EMPLOYEES SAVINGS CREDIT UNION||Montgomery||$2.54||203|
|FIRST KINGDOM COMMUNITY FEDERAL CREDIT UNION||Selma||$0.15||109|
Student Loans in Alabama
If you need a loan to help pay for college, Federal student loans – obtained through the U.S. Department of education – are the most common. Federal student loans are preferable to private student loans because they offer debt forgiveness, charge zero interest until you graduate and allow you to repay the proceeds as a percentage of your income. For more information, see our detailed guide.
At the state-level though, Alabama residents have access to grants and subsidy programs designed to make college more affordable.
Alabama Student Assistance Program (ASAP)
The ASAP Program provides anywhere from $300 to $5,000 in funding per year to students in need of financial aid. To be eligible, you must be a resident of Alabama and attend one of the 80 partner institutions. As well, you need to submit your application by October 1st of each year. You can do so through the Federal Student Aid website or through the financial aid office of your prospective school.
Alabama Student Grant Program
Unlike the ASAP, the Alabama Student Grant Program is determined by academic merit and not financial need. The amount you qualify for varies, but funding never exceeds $1,200 per year. Only select institutions participate in the program, but here is the list of eligible colleges and universities:
- Amridge University
- Birmingham Southern College
- Faulkner University
- Huntingdon College
- Judson College
- Miles College
- Oakwood University
- Samford University
- Spring Hill College
- South University – Montgomery
- Stillman College
- S. Sports Academy
- University of Mobile
Federal Housing Administration (FHA) Loans in Alabama
FHA loans are used to help middle and low-income families achieve their dream of owning a home. They require a small down payment and have lower credit score requirements. In Alabama, you also have the option to refinance up to 97.5% of your home’s value or cash-out up to 85% of its value.
Eligibility requirements include:
- A 3.5% down payment on your property.
- The home must be your primary residence.
- If you filed for Chapter 7 bankruptcy, you must wait 2 years (after your bankruptcy was charged off) before applying for an FHA loan.
- If your home was foreclosed, you must wait 3 years before applying for an FHA loan.
Like many states across the U.S., FHA loan limits vary by county and the size of the property.
Here are the figures by county:
|County||Single Unit Limit (lowest)||Four-Plex Limit (highest)|
|St. Clair County||$331,760||$638,100|
Business Loans in Alabama
As you can see, loan limits remain fairly constant throughout each county. The lowest FHA loan amount is $314,827, while the highest is $636,900. Only three counties in Alabama – Hale, Pickens and Tuscaloosa – allow for higher borrowing amounts than the rest of the state.
If you need a business loan, these online lenders offer reliable service and extremely competitive APRs:
SuperMoney - Compare Business Loans
SmartBiz SBA Loans
Live Oak Bank Amount
$75,000 - $5,000,000
However, if you don’t qualify for the options above or prefer to deal with a local lender in Alabama, the options below are a solid alternative.
While the company doesn’t disclose its APRs, LiftFund is a non-profit lender that offers as little as $500 to upwards of $1,000,000. Loans are available to business owners in Birmingham, Mobile, Tuscaloosa, Montgomery and Huntsville. The average credit score of LiftFund borrowers is 575 – much lower than traditional banks. As well, if your credit score is less than 575, there is a co-signer option.
All businesses qualify for LiftFund loans except those in the adult entertainment industry. However, if you filed for Chapter 7 bankruptcy in the last two years or Chapter 12 bankruptcy in the last year, you’re ineligible.
To learn more, you can contact LiftFund directly through its website, or visit their branch in Bessemer.
Alabama Banks and Credit Unions
There are a wide range of banks and credit unions in Alabama that offer in-state business loans. Reputable lenders include the First Bank of Alabama, Peoples Bank of Alabama and the Alabama Credit Union. However, loan amounts and APRs vary depending on your businesses needs and the cash flows generated by your company. When deciding between lenders, it’s best to setup an in-house consultation and discuss your options.
How to Avoid Debt Cycle
When bills are piling up, taking out a loan can seem like your only option. However, if you’re not careful, the process can quickly get out of hand. You end up trying to service several loans that continue to compound with interest.
If you’re struggling and not sure where to turn, consider contacting a credit counselor. They can advise you on how to reduce your debt load as well as work with creditors to find an amicable solution. Many are available through non-profit organizations and you can find help through the National Foundation for Credit Counseling.
Through the CFPB’s website, you can also find information on how to develop a debt management plan as well as avoid upfront fees when working with debt settlement companies.
If you’re a resident of Alabama and need a reliable loan, you’ve come to the right place. We found plenty of reputable lenders – both online and in-state – that provide affordable financing. When narrowing your search, we always recommend you start with personal loans. Even for those with bad credit, APRs are capped at 35.99%, so they’re a reliable option. As well, Alabama credit unions are another great alternative. Their APRs are capped at 18%, which makes them extremely affordable. However, before taking out any loan, determine whether the product is regulated by Alabama’s Consumer Credit Act or the Small Loan Act. There is a slight overlap between the two statutes so it’s best to ask ahead for time to avoid any surprises.