What is More About Payday Loans Alabama

No wonder anybody can get stuck with emergency financial needs these days specially in a developed nation like the U.S. Life is very fast here and the day today expenses demands consumers’ attention all the time and unexpected cash requirements at the end of month result into more financial distress. Such stress can only be thrown by serving the needs with instant cash flow from payday loans. You might be thinking that how do they provide instant assistance and if there are any laws to protect the borrowers from any type of fraudulence. Well, yes! The State law had put regulations on the lending procedures and also activated interest rate caps to protect the applicants from any type of extra fee.

Can I Qualify for Payday Loans Alabama ?

Short term loans are legal in Alabama and regulated by state statute 5-18A-1 et seq.. The regulations stay same for both store front as well as online payday lenders and it is mandatory for them to abide to them. Along with that all the lenders are required to have payday license in order to continue their functioning in AL. The maximum amount that lender can offer here is $500 with a maximum APR of 456.25% per $100 borrowed. The loan term vary between 10 to 31 days and maximum of one rollover is allowed. Anyone can easily qualify for these loans because the basic eligibility criteria followed by all the lenders is very simple as follow:

• The borrower is at least 19 years old.
• An applicant is a US citizen or a permanent resident.
• He has a steady source of income.

The information that is asked by the lender in the application form to approve the loan is as follows:

• Social Security Number to validate the applicant’s employment
• Active bank account number to process electronic monetary transactions
• Valid address, email id and phone to perform secure and validate loan processing

Does Credit Rating Matter ?

The one main factor about which every consumer worries the most while think of borrowing is credit rating. However, these loans do not perform any hard credit check so anyone who has poor or zero credit rating can easily qualify for these loans. That’s why these loans are also known as no credit check payday loans. But soft credit check is always there which is limited to borrower’s knowledge only. This allows the borrower to improve credit rating by meeting repayment terms and following Alabama payday loan legislation which is beneficial for future big loan lending.

Payments Included in Short Term Lending Procedure:

• Financing fees: Lenders in Alabama can charge 17.50% of the loan as financing fees. The maximum charge for a 14-day $100 loan cannot exceed $17.50.
• Non-sufficient funds (NSF) fees: A lender can charge $30 NSF fee if there are insufficient funds in borrower’s account to meet the repayment.
• Default fees: A lender can charge 3% per month if the borrower gets default on the loan.
• Loan extension fees: Loans extension(rollover) is allowed once in Alabama which demands fee for the new deferred transaction.
• Collection fees: Lenders can charge court costs as well as reasonable attorney’s fees limited to 15% of the check’s face value.

The most common reason behind borrowing instant cash is outstanding utility and grocery bills, medical emergency, car break down and many more. If you are struggling with such situations, State programs like the Alabama Department of Human Resources Food Assistance Division, Alabama Medicaid Agency, Low Income Home Energy Assistance Program (LIHEAP) and Debt Reduction Services Inc. can help you in handling the situation.