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Payday Loan Cost Calculator (True APR)

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Enter the loan amount, fee, and term to see the true annual percentage rate (APR) behind a payday loan's flat fee.

Payday Loan Cost Calculator

Live
True annual percentage rate (APR)
391.1%
Fee as a percentage of loan
15.0%
Total repayment
$345.00
This shows the true annualized cost of a short-term flat fee, for comparison against other credit options. If you're struggling to cover an expense, a credit union payday-alternative loan, a 0% employer paycheck advance, or a hardship plan from the biller may cost far less.

The formula

Fee percentage = Fee / Loan amount Annualized APR = Fee percentage x (365 / loan term in days)
Example

A $300 loan with a $45 fee over a 14-day term: a 15% fee that, annualized across a full year, works out to a true APR of about 391% - many times higher than even the highest-rate credit cards.

Step-by-step guide

  1. Enter the loan amount and the flat fee charged - payday lenders typically quote a fee, not an interest rate, which is exactly what makes the true cost easy to underestimate.
  2. Enter the loan term in days - typically 14 days, tied to a borrower's next payday.
  3. Compare the resulting APR to other borrowing options before deciding - the annualized rate makes it possible to compare apples to apples against a credit card, personal loan, or other short-term credit source.

Why a "small" fee translates into such a large annualized rate

The math isn't a trick - it's simply what happens when a fee that sounds modest in isolation ($45 on $300, a 15% fee) gets stretched across a full year for comparison purposes. A 15% fee charged just once over 14 days is mathematically equivalent to paying that same 15% roughly 26 times over across 365 days if the loan were rolled over repeatedly - which is a genuine risk, since data consistently shows a significant share of payday borrowers do re-borrow or roll over their loan rather than pay it off in a single cycle. The APR calculation isn't measuring what any one borrower actually pays in total; it's a standardized way to compare the COST RATE of different credit products against each other, regardless of the term length.

Common mistakes

Comparing the flat fee percentage directly to a credit card's APR without annualizing first - a 15% one-time fee and a 15% APR are dramatically different costs, since the fee is charged over just days or weeks, not a full year.
Not budgeting for the full repayment amount on the due date - if the full balance plus fee isn't available, rolling over or re-borrowing typically adds another full fee, compounding the cost significantly.

Frequently asked questions

Are there lower-cost alternatives to a payday loan?

Often yes - options worth checking first include a credit union "payday alternative loan" (PAL), a 0%-interest paycheck advance app or employer program, a hardship or payment plan directly from the biller you owe, or a low-limit credit card cash advance, all of which frequently cost meaningfully less than a payday loan's annualized rate.

Why do payday lenders quote a fee instead of an interest rate?

A flat dollar fee sounds smaller and more manageable than the equivalent triple-digit annualized rate would, even though they represent the same underlying cost - this is a well-documented reason consumer advocates recommend converting any fee-based loan to its APR before comparing options.

What happens if I can't repay a payday loan on the due date?

Typically the lender offers to roll the loan over for another term in exchange for an additional fee, which restarts the cycle and adds to the total cost - this is the mechanism behind the debt cycle payday loans are frequently criticized for.

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