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Alabama’s Consumer Credit Act – enforced by the State Banking Department – is designed to control the cost of installment loans and protect Alabama residents. 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 default amount. 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 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 of January 2025

ZippyLoan Apply Now Amount: $100 - $15,000 Min. Credit Score: 0 APR: 5.99% - 35.99% Approval: 5 Minutes Terms: 1 - 72 Months Licensed in Alabama: Yes Get started

Upstart Apply Now Amount: $1,000 - $50,000 Min. Credit Score: 300 APR: 5.6% - 35.99% Approval: 5 Minutes Terms: 3 - 5 Years Licensed in Alabama: Yes Get started

LifeLoans Apply Now Amount: $100 - $40,000 Min. Credit Score: 0 APR: 5.99% - 35.99% Approval: 5 Minutes Terms: 1 - 60 Months Licensed in Alabama: Yes Get started

VivaLoan Apply Now Amount: $100 - $15,000 Min. Credit Score: 0 APR: 5.99% - 35.99% Approval: 5 Minutes Terms: 1 - 60 Months Licensed in Alabama: Yes Get started

NextDayPersonalLoan Apply Now Amount: $100 - $40,000 Min. Credit Score: 0 APR: 5.99% - 35.99% Approval: 5 Minutes Terms: 1 - 60 Months Licensed in Alabama: Yes Get started

FundsJoy Apply Now Amount: $200 - $5,000 Min. Credit Score: 0 APR: 5.99% - 35.99% Approval: 5 Minutes Terms: 1 - 60 Months Licensed in Alabama: Yes Get started

SuperMoney Apply Now Amount: $1,000 - $100,000 Min. Credit Score: 0 APR: 5.99% - 35.99% Approval: < 1 Day Terms: 12 - 120 Months Licensed in Alabama: Yes Get started

PersonalLoans Apply Now Amount: $1,000 - $35,000 Min. Credit Score: 580 APR: 5.99% - 35.99% Approval: < 1 Day Terms: 90 Days - 72 Months Licensed in Alabama: Yes Get started

If you have a problem getting a loan, please read our complete guide on bad credit loans.

Best Personal Loans for Good Credit in Alabama of January 2025

SuperMoney Apply Now Amount: $1,000 - $100,000 Min. Credit Score: 0 APR: 4.99 - 35.99% Approval: 1 Day Terms: 12 - 120 months Licensed in Alabama: Yes Get started

Prosper Apply Now Amount: $2,000 - $40,000 Min. Credit Score: 640 APR: 7.95% - 35.99% Approval: 1 - 3 Days Terms: 36 - 60 months Licensed in Alabama: Yes Get started

Credible Apply Now Amount: $1,000 – $100,000 Min. Credit Score: 0 APR: 4.99 - 35.99% Approval: 1 Day Terms: 12 - 120 months Licensed in Alabama: Yes Get started

PersonalLoans Apply Now Amount: $1,000 – $35,000 Min. Credit Score: 580 APR: 5.99% – 35.99% Approval: < 1 Day Terms: 90 Days – 72 Months Licensed in Alabama: Yes Get started

LendingTree Apply Now Amount: $1,000 – $50,000 Min. Credit Score: 500 APR: 3.99% – 35.99% Approval: < 1 Day Terms: 1 – 5 Years Licensed in Alabama: Yes Get started

Upgrade Apply Now Amount: $1,000 – $50,000 Min. Credit Score: 600 APR: 7.99% - 35.97% Approval: < 1 Day Terms: 3 - 5 Years Licensed in Alabama: Yes Get started

PayOff Apply Now Amount: $5,000 – $35,000 Min. Credit Score: 640 APR: 5.99% – 24.99% Approval: 1 – 7 Days Terms: 2 - 5 Years Licensed in Alabama: Yes Get started

Discover Apply Now Amount: $2,500-$35,000 Min. Credit Score: 660 APR: 6.99-24.99% Approval: 1 Day Terms: 24 - 84 Months Licensed in Alabama: Yes Get started

Freedomplus Apply Now Amount: $7,500 - $40,000 Min. Credit Score: 680 APR: 6 - 15% Approval: 1 - 7 Days Terms: 36 - 84 months Licensed in Alabama: Yes Get started

Payday Loan Laws in Alabama of January 2025

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 for 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. All lenders must have a current license to comply 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 of January 2025

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.

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 of January 2025

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 must pay an annual fee to maintain their license.

There are no limits on the amount you can borrow, and APRs can reach as high as 300% in Alabama. 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 are added 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 of January 2025

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 59% to 160%, but the lender is licensed in Alabama and complies with all applicable laws. The State Banking Department granted its license.

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 of January 2025

SuperMoney - Compare Loans to Buy Car Apply Now Amount: $1,000 - $100,000 Min. Credit Score: 0 APR: From 1.99% Licensed in Alabama: Yes Get started

SuperMoney - Compare Loans to Refinance Car Apply Now Amount: $1,000 - $100,000 Min. Credit Score: 0 APR: From 1.99% Licensed in Alabama: Yes Get started

StandardAutoFinancial Apply Now Amount: Up to $100,000 Min. Credit Score: 0 APR: Vary Licensed in Alabama: Yes Get started

MaxCarLoan Apply Now Amount: Up to $100,000 Min. Credit Score: 0 APR: Vary Licensed in Alabama: Yes Get started

FirstChoiceAutoLoan Apply Now Amount: Up to $100,000 Min. Credit Score: 0 APR: Vary Licensed in Alabama: Yes Get started

MyAutoLoan Apply Now Amount: $8,000 - $100,000 Min. Credit Score: 500 APR: 2.74% - 27% Licensed in Alabama: Yes Get started

LendingTree Apply Now Amount: $1,000 - $100,000 Min. Credit Score: 500 APR: From 3.09% Licensed in Alabama: Yes Get started

Consumers Apply Now Amount: $250 - $500,000 Min. Credit Score: 640 APR: 2.99% - 21.99% Licensed in Alabama: Yes Get started

OneMainFinancial Apply Now Amount: $1,500 - $20,000 Min. Credit Score: 0 APR: 18.00% - 35.99% Licensed in Alabama: Yes Get started

CarsDirect Apply Now Amount: $1,000 - $45,000 Min. Credit Score: 0 APR: From 0.99% Licensed in Alabama: Yes Get started

Auto Credit Express Apply Now Amount: $1,000 - $35,000 Min. Credit Score: 0 APR: From 1.99% Licensed in Alabama: Yes Get started

CapitalOne Apply Now Amount: $7,500 - $50,000 Min. Credit Score: 500 APR: From 3.39% Licensed in Alabama: Yes Get started

LendingClub Apply Now Amount: $5,000 – $55,000 Min. Credit Score: 510 APR: 3.99% - 24.99% Licensed in Alabama: Yes Get started

Carvana Apply Now Amount: $1,000 - $100,000 Min. Credit Score: 0 APR: 3.90% - 27.90% Licensed in Alabama: Yes Get started

Best Auto Loans for Good Credit in Alabama of January 2025

SuperMoney - Compare Loans to Buy Car Apply Now Amount: $1,000 - $100,000 Min. Credit Score: 0 APR: From 1.99% Licensed in Alabama: Yes Get started

SuperMoney - Compare Loans to Refinance Car Apply Now Amount: $1,000 - $100,000 Min. Credit Score: 0 APR: From 1.99% Licensed in Alabama: Yes Get started

LendingTree Apply Now Amount: $1,000 - $100,000 Min. Credit Score: 500 APR: From 3.09% Licensed in Alabama: Yes Get started

Consumers Apply Now Amount: $250 - $500,000 Min. Credit Score: 640 APR: 2.99% - 21.99% Licensed in Alabama: Yes Get started

Lightstream Apply Now Amount: $5,000-$100,000 Min. Credit Score: 660 APR: 4.99% to 9.19% Licensed in Alabama: Yes Get started

CapitalOne Apply Now Amount: $7,500 - $50,000 Min. Credit Score: 500 APR: From 3.39% Licensed in Alabama: Yes Get started

MyAutoLoan Apply Now Amount: $8,000 - $100,000 Min. Credit Score: 500 APR: 2.74% - 27% Licensed in Alabama: Yes Get started

Carvana Apply Now Amount: $1,000 - $100,000 Min. Credit Score: 0 APR: 3.90% - 27.90% Licensed in Alabama: Yes Get started

Usbank Apply Now Amount: $3,000 - $100,000 Min. Credit Score: 650 APR: From 3.12% Licensed in Alabama: Yes Get started

Bank Of America Apply Now Amount: $5,000 - $100,000 Min. Credit Score: 640 APR: From 3.54% Licensed in Alabama: Yes Get started

LendingClub Apply Now Amount: $5,000 – $55,000 Min. Credit Score: 510 APR: 3.99% - 24.99% Licensed in Alabama: Yes Get started

Clearlane Apply Now Amount: $5,000 - $100,000 Min. Credit Score: 600 APR: 3.54% - 10.24% Licensed in Alabama: Yes Get started

OneMainFinancial Apply Now Amount: $1,500 - $20,000 Min. Credit Score: 0 APR: 18.00% - 35.99% Licensed in Alabama: Yes Get started

Credit Unions in Alabama of January 2025

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, you can receive an APR as low as 9.92%. Loans are unsecured, so no collateral is required. Redstone also 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 that you need to be a member. To qualify, you must open a Redstone Savings Account and maintain a minimum balance of $5.

Redstone personal loans are available at 20 locations across Alabama, and the lender has branches in Huntsville, Hartselle, Arab, Guntersville, and many others.

America’s First Federal Credit Union

While loan amounts vary by the 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:

• Bibb
• Blount
• Calhoun
• Jefferson
• Shelby
• Clair
• Walker
• Mobile and Talladega (certain areas, not all)

America’s first also operates 19 branches across Alabama located in Bessemer, Cullman, Birmingham, Gardendale, etc.

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.

There are 23 branches and ATM locations across Alabama with services in Auburn, Montgomery, Millbrook, Opelika, and others.

All Licensed Credit Unions in Alabama of January 2025

Student Loans in Alabama of January 2025

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 1^st of each year. You can do so through the Federal Student Aid website or your prospective school’s financial aid office.

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 of January 2025

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:

Business Loans in Alabama of January 2025

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 Apply Now Amount: Up to $10,000,000 APR: Vary Min. Credit Score: 0 Licensed in Alabama: Yes Get started

LendingClub Apply Now Amount: $5,000 - $500,000 APR: 9.77% - 35.98% Min. Credit Score: 600 Licensed in Alabama: Yes Get started

LendingTree Apply Now Amount: $5,000 - $500,000 APR: 5.99% – 35.99% Min. Credit Score: 500 Licensed in Alabama: Yes Get started

Kabbage Apply Now Amount: Up to $250,000 APR: 24% – 99% Min. Credit Score: 560 Licensed in Alabama: Yes Get started

SmartBiz SBA Loans Apply Now Amount: Up to $350,000 APR: 9.28 - 10.52% Min. Credit Score: 650 Licensed in Alabama: Yes Get started

CredibilityCapital Apply Now Amount: Up to $350,000 APR: 10.00 - 25.00% Min. Credit Score: 680 Licensed in Alabama: Yes Get started

Live Oak Bank Apply Now Amount: $75,000 - $5,000,000 APR: 5.50 - 8.25% Min. Credit Score: 650 Licensed in Alabama: Yes Get started

Funding Circle Apply Now Amount: Up to $500,000 APR: 12.18 - 36.00% Min. Credit Score: 660 Licensed in Alabama: Yes Get started

OnDeck Apply Now Amount: Up to $500,000 APR: 9.00 - 99.00% Min. Credit Score: 600 Licensed in Alabama: Yes Get started

BlueVine Apply Now Amount: Up to $5,000,000 APR: 15.00 - 78.00% Min. Credit Score: 600 Licensed in Alabama: Yes Get started

CaminoFinancial Apply Now Amount: Up to $1,000,000 APR: Vary Min. Credit Score: 0 Licensed in Alabama: Yes Get started

TheLoanExchange Apply Now Amount: $6,000 to $250,000 APR: Vary Min. Credit Score: 0 Licensed in Alabama: Yes Get started

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.

LiftFund Loans

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.

You can contact LiftFund directly through its website or visit their branch in Bessemer to learn more.

Alabama Banks and Credit Unions

There is 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 business needs and your company’s cash flows. When deciding between lenders, it’s best to set up 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 and 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 developing a debt management plan and avoiding upfront fees when working with debt settlement companies.

Conclusion

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. APRs are capped at 35.99% even for those with bad credit, so they remain 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 of time to avoid surprises.