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Payday Loan APR Calculator
A flat $15 per $100 fee sounds small. Annualised it is 391%. This calculator does the conversion and shows what the same amount would cost as an installment loan.
True annual percentage rate
—APR
- Finance charge
- —
- Total due on the due date
- —
- Cost per day
- —
- If rolled over 6 times
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We do not roll over or renew payday loans. The last row is shown so you can see what repeat borrowing would cost elsewhere.
Compare with an installment loanCompare with an installment loan for the same amount
| Option | Term | Payment | Total cost of credit | APR |
|---|
Results are estimates for illustration only and are not an offer of credit. Your actual amount, APR, fees and payment depend on your state, income and credit profile and are disclosed in full before you sign. All loans are subject to credit approval.
Why a $15 fee becomes a 391% APR
A payday lender quotes a flat fee, not a rate. Borrow $500 for 14 days at $15 per $100 and you pay $75. That looks like 15%, but APR measures cost per year, and 14 days is only about one twenty-sixth of a year. Annualised, $75 on $500 for two weeks is 391%.
The high number is a product of the short term, not of a lender charging 391% of your balance. It matters because it is the only figure that lets you compare a two-week loan with a two-year one on the same scale, which is exactly why the Truth in Lending Act requires it to be disclosed.
What common fee levels work out to
| Finance charge per $100 | Cost on $500 for 14 days | APR |
|---|---|---|
| $10 | $50 | 261% |
| $15 | $75 | 391% |
| $20 | $100 | 521% |
| $25 | $125 | 652% |
| $30 | $150 | 782% |
The part that catches people out
A payday loan is only cheap if it is repaid once, on time. The cost becomes damaging when the loan is renewed because the borrower cannot cover the full balance and the fee in one paycheck. Six renewals on a $500 loan at $15 per $100 means $525 in fees with the original $500 still owed.
We do not renew or roll over payday loans, and in states that require it we offer an extended payment plan at no extra charge. If a single payment looks tight, an installment loan is usually the better structure.
Better options to weigh first
- Credit union payday alternative loans, capped at 28% APR.
- Cash advance apps, if you only need a few hundred dollars.
- Our installment loans, from 59% APR with a fixed end date.
- A payment plan directly with the biller, which is often free.
Frequently asked questions
How do you calculate payday loan APR?
Divide the finance charge by the amount borrowed, divide that by the number of days in the term, then multiply by 365 and by 100. A $75 charge on $500 for 14 days gives an APR of 391%.
Why is payday loan APR so high?
Because APR expresses cost as a yearly rate and a payday loan lasts about two weeks. The fee itself is 15% of the amount borrowed; annualising a two-week cost produces a large number. It is the correct basis for comparing loans of different lengths.
What is a typical payday loan fee?
Most states that permit payday lending allow $15 to $25 per $100 borrowed. The exact cap is set by state law, and some states prohibit payday lending entirely.
Is an installment loan cheaper than a payday loan?
For anything you cannot repay in a single paycheck, usually yes. An installment loan spreads repayment over months at a lower annualised rate and has a fixed payoff date, so the balance falls with every payment.
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