Payday Loans Dothan AL

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Last updated by Zaving Editorial Team, on April 9th, 2024

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What are payday loans and can I get them in Dothan, Alabama?

Payday loans are short-term, high-interest loans designed to be repaid on the borrower's next payday, commonly used for unexpected expenses or emergencies. This financial tool involves borrowing a small amount that must be repaid, along with fees and interest, within a short period, typically a matter of weeks.

In Dothan, Alabama, payday lending is legal, and individuals can access these loans through various physical storefronts and online platforms.

To qualify for a payday loan in this area, specific eligibility criteria must be met:

  • Age: Applicants must be at least 19 years old, a departure from the typical minimum age of 18 in most other states.
  • Income: Providing proof of a regular source of income is a prerequisite.
  • Residency: Borrowers need to be U.S. citizens or permanent residents and reside in Alabama.
  • Bank account: Having an existing checking account is typically necessary.
  • ID: Applicants usually need to present a valid photo ID for identity verification.

Before considering a payday loan in Dothan, it's essential to thoroughly review the terms and conditions, including fees and interest rates, and ensure the ability to repay on time to avoid falling into a cycle of debt.

What are the rules for payday loans in Alabama?

When contemplating payday loans in Alabama, it's crucial to understand the regulations governing these short-term financial transactions:

  • Maximum loan amount: Borrowers can access payday loans up to $500.
  • Loan term: The loan term can range from a minimum of 10 days to a maximum of 31 days.
  • Maximum finance rate and fees: Lenders are restricted to charging no more than 17.5% of the amount advanced.
  • Finance charge for a 14-day $100 loan: For a 14-day loan of $100, the finance charge is $17.50.
  • APR for a 14-day $100 loan: The Annual Percentage Rate (APR) for a 14-day $100 loan is calculated at 456%.
  • Rollovers permitted: A payday lender in Alabama can extend a loan for the same customer once, after which the borrower must repay the entire outstanding amount.
  • Cooling-off period: After taking out two payday loans in a row from the same lender, you must pay off the amount in full and need to wait at least one day before taking out another one.

These regulations aim to protect consumers and ensure transparency in payday lending practices. Borrowers should carefully review the terms and conditions of payday loans to make informed decisions based on their financial situations.

What are the pros and cons of payday loans in Dothan?

When considering payday loans in Dothan, Alabama, individuals should carefully evaluate the positives and negatives:


  • Accessibility: Payday loans provide a quick way to access funds, catering to urgent financial needs.

  • No credit check: Lenders typically skip traditional credit checks, making these loans available to those with poor credit.

  • Straightforward application: The process for payday loans in Dothan is usually uncomplicated, requiring minimal documentation.

  • Emergency cover: These loans offer a short-term financial solution for unexpected expenses until the next paycheck.


  • High costs: Payday loans in Dothan can incur significant fees and interest rates.

  • Short repayment terms: Meeting the repayment within the 10–31-day period may pose a challenge.

  • Limited loan amounts: Alabama caps payday loans at $500, which might not be adequate for substantial financial needs.

  • Debt cycle risk: Due to short repayment periods and high costs, borrowers may find themselves in a cycle of debt, necessitating new loans to cover existing ones.

More of your frequently asked questions about payday loans in Alabama

Can I take out multiple payday loans in Alabama?

In Alabama, having more than one payday loan concurrently is acceptable, provided the total outstanding amount from all lenders doesn't exceed $500. It's important to follow this regulation, as surpassing the limit prevents borrowers from initiating new deferred presentment transactions until the outstanding amount decreases to $500 or less. This measure aims to prevent the accrual of excessive payday loan debt and encourages responsible borrowing practices.

What happens if I can't repay my payday loan in Alabama?

If you're facing challenges with repaying your payday loan in Alabama, promptly contacting your lender is crucial. They may offer an extended repayment plan, typically with four equal monthly installments. Prior to pursuing any legal actions for non-payment, your lender is obligated to send you a notice outlining your rights. In cases where your check bounces due to insufficient funds or a closed account, the payday loan company holds the right to employ legal measures for debt recovery. This may include recovering court costs and a reasonable attorney's fee, capped at 15% of the check's face value. Additionally, there might be a $30 charge for the bounced check. Importantly, pursuing criminal action is only permissible if the check bounced due to a closed account.

Can I get a payday loan in Alabama with bad credit?

Having bad credit doesn't necessarily prevent you from obtaining a payday loan in Alabama. Payday lenders typically focus on factors such as income and employment, making it feasible for individuals with less-than-perfect credit to qualify. Meeting other requirements, like having a steady income, a valid ID, and an active checking account, is essential. However, it's crucial to be aware of the high fees and interest rates associated with payday loans and assess your ability to repay the loan promptly.

What are some alternatives to payday loans in Alabama?

In Alabama, individuals seeking alternatives to payday loans have multiple options to address short-term financial needs. Credit unions and community banks may offer small-dollar loans with more favorable terms than payday loans. Seeking help from local charities, non-profit organizations, or government assistance programs can provide financial support and guidance. Exploring extended payment plans with creditors, using credit cards with lower interest rates, or seeking temporary assistance from friends and family are all potential alternatives.