| Payday Loans
Legal? |
Yes |
| Legal Citation: |
Ala. Code § 5-18A-1 et seq. |
| Terms
of Payday Loans: |
-> Maximum Loan Amount = $500
-> Loan Term = 10 - 31 days
-> Maximum Finance Charge = 17.5%; 3%
/ month after default
-> Finance Charge for 14 day $100 Loan
= $17.50
-> APR for 14 day $100 Payday Loan = 456.25% |
| Limits of Debt: |
-> Maximum # of Outstanding Loans: None
-> # of Rollovers Allowed: 1
-> Repayment Plan : Yes
-> Cooling-Off Period: Next business day
(after 2 continuous payments) |
| Debt Collection Limits: |
-> Collection Limits: $30 for NSF Check
+ Attorney / Court fees; maximum upto 15%
of face value of check.
-> Criminal Action: Not Allowed
|
| Where to Get Information? |
-> Regulator: Alabama Banking Department (Visit
their Website)
Address: P.O. Box 4600 Montgomery AL 36103
Phone: (334) 242-3452
Fax: (334) 353-5961
Regulatory Contact: Arlene Baldwin, Consumer
Services Specialist, Bureau of Loans
Important Links
-> Complaints
& Disputes
-> Download
Complaint Form (PDF) |
i) APR (Annual Percentage Rate):
The Annual Percentage Rate (APR)
is an interest rate that is different from the Finance
Charge. The APR was developed to gauge the "true
cost of borrowing a loan." The finance charge
is a mere interest rate e.g 8% that does not provide
a lot of useful information. However, the APR does.
Here are the components (finance charges) included
in APR:
-> Loan processing fees
-> Underwriting fees
-> Document preparation fees
-> Private mortgage insurance
-> Pre-Paid interest charges: The interest charged
from the date of closing a loan to the end of the
month (when payment is due).
-> Points - Discount & Origination Points
The following items are NOT included
in the Annual Percentage Rate (APR) calculation:
-> Title or abstract fee
-> Appraisal fee
-> Escrow fee
-> Attorney fee
-> Notary fee
-> Document preparation fees
-> Home inspection fees
-> Recording fees
-> Transfer taxes
-> Credit report look up fees
2) Cooling-Off Period
A Cooling-Off Period is when all
loan clients receive a 3 (three) business day cooling-off
period during which clients can change their mind
about the agreement and exit or cancel with only
a specified fee. A business day is any day that
is not a Saturday, Sunday or public holiday.
3) NSF Check (Non-Sufficient Funds)
An NSF check is when a check is
dishonored because the Payor does not have sufficient
funds in his/her bank account.
4) Loan Term
The loan term is the length of
time after which the loan is due. For example, if
the loan term is 30 days, the loan becomes due after
30 days of initial borrowing date. |
