Payday Loan Calculator

What is a payday loan?

A payday loan is a small, short-term cash advance meant to bridge the gap until your next paycheck. Lenders typically charge a flat finance fee rather than a traditional monthly interest rate, which makes the true annual cost hard to compare with standard installment loans unless you convert the fee to an effective annual percentage rate (APR).

Because repayment is usually due in one lump sum within two to four weeks, even a modest dollar fee can translate into a very high APR when annualized. Before borrowing, compare the total repayment amount and daily cost against lower-cost options such as a credit union payday alternative loan or a personal installment loan using our advanced loan calculator.

How payday loan fees are calculated

Payday lenders commonly quote one of three fee structures. The calculator supports all three so you can match the disclosure on your loan agreement:

• Fee per $100 borrowed: The most common storefront format, such as $15 for every $100 advanced for a 14-day term.
• Flat fee: A single dollar charge regardless of loan size, for example a $75 fee on a $500 advance.
• Stated APR: Some lenders disclose an annual rate; the fee for the short term is prorated by days outstanding.

Total finance fee formulas

Let $P$ be the loan principal, $d$ the term in days, and $f$ the quoted fee input:

Total repayment is principal plus fee. Daily cost divides the fee by the term in days. To compare payday fees with mortgage or auto loan disclosures that use full TILA APR math, see our APR calculator.

Effective APR for short-term credit

Regulators and consumer advocates annualize the finance charge so borrowers can compare short-term products on a common basis. The simplified effective APR formula used for payday loans is:

This treats the fee as the total finance charge for the period and scales it to a nominal annual rate over 365 days. It does not assume compound interest within the term, which matches how many state comparisons and CFPB examples present payday loan costs.

Worked example

Suppose you borrow $500 for 14 days with a fee of $15 per $100 borrowed:

1. Total finance fee: ($500 / $100) × $15 = $75
2. Total repayment: $500 + $75 = $575
3. Daily finance charge: $75 ÷ 14 ≈ $5.36 per day
4. Effective APR: ($75 / $500) × (365 / 14) × 100 ≈ 391.07%

The fee is only 15% of the principal for two weeks, but annualizing that short window produces an APR near 391%. That is why comparing the dollar fee and total repayment is often more intuitive than the percentage alone.

Alternatives and rollover risk

If you cannot repay on the due date, some lenders offer rollovers or new loans that charge another full fee. Repeated renewals can trap borrowers in a cycle of debt where fees exceed the original principal. Credit unions may offer payday alternative loans (PALs) at much lower rates, and a standard personal loan spread over several months may cost far less in total dollars even if the stated APR is lower on paper.

Frequently asked questions