South · Vehicle-title lending · State statute guide
Title loan laws in Alabama
Yes — Alabama licenses single-payment title loans. State law sets what a lender may charge and when it may take your vehicle; the limits below are the legal ceiling.
Are title loans legal in Alabama?
Yes — Alabama licenses single-payment title loans. State law sets what a lender may charge and when it may take your vehicle; the limits below are the legal ceiling.
Statute: Ala. Code §5-18-1 et seq.
A title loan is secured by your vehicle, so legality is only half the question — the other half is what the statute lets the lender do with the lien if you fall behind. In Alabama, repossession and sale are regulated processes with notice and surplus protections.
What a title loan really costs
Alabama's cap: 25%/mo up to $1,500; 12.5% to $2,500. On a secured loan of $1,000 that is roughly $250 in fees for one month. Installment structures spread the cost but multiply the months — read the total of payments, not the monthly figure.
Repossession: when the lender can take the car
In Alabama a title lender must follow the statutory default process — typically a cure period and written notice before repossession, and an accounting of the sale if the car is sold. Anything beyond the vehicle's debt surplus generally has to come back to you.
Who regulates title lending in Alabama?
Alabama State Banking Department licenses title lenders and takes complaints — the license lookup and complaint desk are at banking.alabama.gov.
Repossession rules in Alabama
Where title lending is licensed, repossession follows the commercial-code baseline that every secured lender must run: a genuine default, written notice and a chance to cure, a commercially reasonable sale of the vehicle, and any surplus above the debt returned to the borrower. Alabama's notice periods and licensing enforcement run through the Alabama State Banking Department (banking.alabama.gov) — the same office that takes title-lender complaints.
Before a missed payment becomes a default, request the extended payment plan in writing: it pauses the repossession clock and costs a fraction of recovery fees.
Last verified September 6, 2026 · Statute: Ala. Code §5-18-1 et seq. · Source: Alabama State Banking Department · Not legal advice — confirm with the regulator.
Questions about Alabama title loan laws
What is the maximum title loan amount in Alabama?
$2,500 max
Can the lender repossess my car in Alabama?
Only as the statute allows: in lending states repossession generally requires a default, advance notice and a right to cure, and the lender must usually return any surplus from the sale above your debt. Check the Alabama State Banking Department's rules before you sign.
How much does a title loan cost in Alabama?
The statutory cap: 25%/mo up to $1,500; 12.5% to $2,500. Compare the total of payments, not the monthly rate — a 25% monthly fee is about 300% APR on a single-payment note.
Are online title loans legal in Alabama?
Only from a lender licensed in Alabama. The lien, disclosures and rollover limits follow your state's statute no matter where the website is based.
Where do I report an illegal title lender in Alabama?
To the Alabama State Banking Department (banking.alabama.gov). Bring the title agreement and payment history; if the lender is unlicensed, also notify the Alabama Attorney General and the CFPB.
What are the repossession laws in Alabama?
Secured-lending repossession everywhere follows the same baseline: a genuine default, written notice with a chance to cure, a commercially reasonable sale, and any surplus above the debt returned to the borrower. Alabama's notice periods and licensing enforcement run through the Alabama State Banking Department. Before missing a payment, request the extended payment plan in writing — it pauses the clock and costs far less than recovery fees.