Payday Loan Calculator
Calculate the true cost and APR of payday loans to make informed borrowing decisions
Calculate Payday Loan Costs
Principal amount you want to borrow
Interest or fee charged by the lender
Typical payday loans are 14 days
Monthly fee on outstanding balance (optional)
Payday Loan Cost Analysis
Cost Breakdown
Key Metrics
APR Analysis
Example Calculation
Typical Payday Loan
Loan Amount: $100
Finance Charge: $15
Term: 14 days
APR Calculation:
((15/100) × 365) / 14 × 100
Result
APR: 391.07%
Total to repay: $115
If rolled over 1 year: $391+
Better Alternatives
Personal Loans
6-36% APR, longer terms
Credit Cards
18-24% APR, flexible payments
Credit Union Loans
Lower rates for members
Ask Family/Friends
Often interest-free
Employer Advance
No interest, payroll deduction
Understanding Payday Loans
What is a Payday Loan?
A payday loan is a very short-term loan provided to a borrower on the agreement that the loan is repaid on their next payday. Lenders offer the loan as a percentage of the borrower's next paycheck, allowing them to access their wages upfront.
Key Characteristics
- •Very short terms (typically 14 days)
- •High fees and interest rates
- •No collateral required
- •Minimal credit checks
- •Quick approval and funding
APR Formula
APR = ((Finance Charge ÷ Loan Amount) × 365) ÷ Term Days × 100
Why APRs Are So High
- •Short loan terms amplify annual rates
- •High fees relative to loan amount
- •Additional monthly fees for rollovers
- •Higher risk for lenders
Example: A $100 loan with $15 fee for 14 days = 391% APR
Risks and Disadvantages
- ⚠️Extremely high APRs (often 300-400%+)
- ⚠️Debt trap potential with rollovers
- ⚠️Immediate full repayment required
- ⚠️Can negatively impact credit if defaulted
- ⚠️May lead to overdraft fees
When to Consider
Payday loans should only be considered as a last resort for true emergencies when:
- •You have exhausted all other options
- •You're certain you can repay on time
- •The emergency cost exceeds the loan cost
- •You have a plan to avoid future payday loans