Payday Loans in Alabama
Posted on Tuesday, June 15th, 2010 at 11:45 am in Cash Loan Info by State
There are only 25 states within the United States which have instituted laws directly related to payday loans. Other states, such as Alabama, instead have small loan laws, which they reinforce in regards to payday loans. Although these laws do not differ greatly from payday loan laws, and they reinforce a lot of the same regulations as a typical payday loan law.
For loan term, Alabama allows for a minimum of 7 days and a maximum of 31 days. Seven days is relatively short for many States. Although some allow for a shorter period, the average minimum for a loan term is 14 days. A borrower in the state of Alabama may not take a loan of more than $500. The fee for a payday loan is 17.5%.
Payday lenders are allowed to offer one rollover following the initial loan term. At this point, the full amount of the loan is due. In some case, if the borrower is unable to pay the balance in full, the payday lender may choose to extend a repayment option. This option allows for the balance to repaid in four installments. These installments will be repaid, once a month over four months. If the borrower is unable to repay the loan, the lender may charge an additional fee.
The previously mentioned law is in place to give the borrower an opportunity to repay their loan without falling deeper and deeper in debt in the process. Laws were created in order to protect the borrower, and to remove the unlawful payday lenders which have given the entire industry a bad name.
Sources: http://www.credit.com/credit_information/credit_law/PaydayLoanLaws.jsp , http://www.paydayloanlaws.com/paydayloan_west/?p=colorado
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