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AL · LOAN-AGMT · Updated July 2026 · Free

Alabama Loan Agreement

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Alabama at a glance: Default Interest Cap: 8% per year · Maximum Written Cap: 15% per year (Ala. Code § 8-8-1) · Governing Law: Ala. Code Title 8

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Overview

Loan Agreements in Alabama

Alabama caps interest rates at 8% per year unless a higher rate is written in the contract, up to a maximum usury limit of 15% (Ala. Code § 8-8-1).
Key Facts

Alabama Loan Agreement — Quick Reference

RequirementAlabama Rule
Default Interest Cap8% per year
Maximum Written Cap15% per year (Ala. Code § 8-8-1)
Governing LawAla. Code Title 8
Legal Requirements

Alabama Legal Requirements

  • Interest rates exceeding 8% must be in a signed written contract.
Governing Laws

Alabama Governing Laws

Ala. Code § 8-8-1
Rate of Interest
Regulates contract interest limits.

Read the full text of these laws at Cornell Law School's Alabama legal resources or your state legislature's official website.

Questions & Answers

Alabama Loan Agreement — Frequently Asked Questions

What is the penalty for usury in Alabama?

The lender forfeits all interest and can only recover the principal amount.