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What is an Alabama Title Loan?

An Alabama title loan is a title loan offered in the state of Alabama, with all local rules and regulations in effect. A standard title loan is a loan wherein the title to an asset, such as a vehicle, has been proffered as collateral to secure the loan. Title loans, most frequently brokered with the title to an automobile, tend to be short-term (30 days to a few months), medium to small in scale ($500 to $10,000), and have high-interest rates, like payday loans. Title lending is often predatory, which is part of the reason Alabama requires title lenders to be registered. Normally, if an asset is seized and sold by the lender in the case of a defaulted loan, the difference between what was owed and what was made in resale is given back to the lendee. In Alabama, however, the lender is legally allowed to keep all of the resultant funds. Lendees have a grace period of 30 days past the date of default to pay back the missing funds to avoid repossession. Another Alabama-specific loan stipulation is that monthly interest cannot exceed 25%, and, perhaps more significantly, title loans can only last up to one month. Below, we at Online Loans have broken down the assorted information available across the web into a convenient need-to-know to make getting you title loan as simple as possible.

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Rates (%)

Interest rates on title loans in Alabama will vary depending on a number of factors, such as perceived risk, but cannot legally exceed 25% per month, or roughly 300% APR, close to the national average.

Credit Requirements

There are no strict credit requirements in title lending, as credit scores are not a required step in acquiring a loan. There are some requirements though that you should be sure you meet. In Alabama, a title loan applicant must be at least 19, and the title to be proffered as collateral must be lien-free and fully paid down. In other words, you must fully own the asset to be used as collateral in a title loan in order to be eligible. You must also be able to provide documentary proof of identity, of residence, and in some cases of income.


Title loans in Alabama fall under the Pawn Shop Act (Title 5, Chapter 19A) which means that the same rules apply to property accepted by pawn shop brokers. This includes the following specific statutes: Vehicle is Sold: 30 days after the maturity date (§ 5-19A-6) Minimum Payback Term: 30 days (§ 5-19A-8(7)) Maximum Interest Rate: 25% (§ 5-19A-7(a))

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