Since payday loans are legal in Alabama thus it is possible to reach out to get loan help from payday lenders when you are unable to maintain expenses with fixed salary. The history of payday loans in Alabama tells that this state was among the 19 other states that took part in the legislation procedure of small loans. This event took place in 1990s.

This was done to set caps on the maximum amount of interest that can be charged. Implementation of such usury laws was intended to control the practice of charging heavy interest of loans. Although rules have been amended and such measures have withdrawn thereby allowing payday lenders to offer loans at very lenient terms in current scenario.

Importance of a post dated check-

As per Alabama payday loans laws payday lending is considered as deferred presentment transactions. Although no costly asset like home or car is demanded from the borrower, but borrowing in Alabama does require some kind of assurance from the borrower. The lender will accept a post dated check written by the borrower against the loan amount that is needed.

Payday loans will not be offered if you are not able to provide a post dated check to the lender. Terms under which payday loans are offered in the state can be negotiated. Payday loan companies work under the Alabama State Banking Office. The companies should let representative from the office to review their business records.

If you want to make sure about every aspect of Alabama payday loans laws then get complete information by visiting here

Payday lending laws in Alabama-

When it comes to payday lending, rules apply to both online and in store payday lenders. To operate inside the state the lender must comply with regulations set by the state. In Alabama payday lenders work according to this act

Lenders whoever wants to operate in Alabama should be licensed. The lender must have to share all loan information related to terms, interest rates, fees and repayment period. That should be done before the loan agreement is signed.

At present, payday lending in Alabama is not regulated by Small Loan Act. This Act was applicable for some old loan companies and has allowed these companies to expand. This Act included conditions that also favor some new companies to appear.

Terms of payday lending-

As per Alabama payday loans laws, the lender can offer up to $500 of loan. Interest percent not more than 17.5 should be charged by the lender of Alabama. Loan extension is allowed once but lender is not allowed to offer you a new loan till the date loan is paid.

Besides, if you are unable to make payment in full by the end of extension then payday lender can provide you a repayment plan. It is mandatory for the payday lender to hand over you a written statement where every detail about fees and charges are mentioned. By signing the agreement you will acknowledge that you have received notifications from the lender and agreed with the mentioned fees.

Limits of payday loans-

Alabama payday loans laws restrict the number of loans that a person can borrow. In Alabama payday lenders need to review the local database that records payday loans in the state once a new application for loan is received. A borrower can get one loan from any particular lender.

If you have applied for loan from a lender and approached a different lender for second loan then the second lender should reject your application or else the lender will face penalty.

According to payday loan laws, one roll over is permitted if the borrower is not able to repay loan on due time. The lender is not permitted to get into a new deferred presentment transaction with the same borrower after two consecutive transactions. This is to be followed until the next business date after the loan repayment is completed in full.

Loan collection practices-

There are specific collection practices that are to be followed when the repayment is delayed or in case of missed payment. If loan repayment does not take place on due date then the lender at first should try to cash the post dated check provided by you. On finding insufficient balance in the checking account the lender has the right to charge a fee for bounced check.

Also, it is necessary that the lender send written notification informing you about pending collection measures and your legal rights. You will get 15 days of time to respond. In case if you don’t reply then the lender can file a lawsuit against you. In such scenario you will have to face law for civil charges from date on which the loan is due.

You will not be criminally prosecuted if the given check is bounced due to insufficient balance. The law does not permit the lender to do this. However, if the check was returned since you have closed bank accounts then in this rare scenario you will be subjected to criminal prosecution.

For more information about laws of payday loans in Alabama you can click on this link

A major regulatory body handles cases of small cash loans inquiry in Alabama. Borrowers can also file complaint against the lender. The person just needs to download the online complaint form, complete it and send it to given mailing address mentioned on the complaint page.

If payday loan laws are violated by payday lenders then the lender will be subjected to criminal prosecution. Not only the lender will be fined for any illegal transaction but also it may result in loss of license. If you come to know that your loan company is disobeying rules aligned for payday lending then you can file a written complaint with the Alabama State Banking Office.

A representative from the office will investigate the case by interviewing the witness, checking reviews about the payday lender from the business records. This procedure will help the representative to make sure if criminal charges should be imposed or not.

Apply now
Register Now 888-470-9288