Payday Loan Calculator Calculate Payday Loan Cost Loan Amount ($) ...
Payday Loan Calculator
Calculate Payday Loan Cost
Loan Amount ($)
Loan Term (Days)
Fee per $100 Borrowed ($)
Most lenders charge $10–$30 per $100 borrowed for a 2-week loan.
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Results
Cost Breakdown
$500
$75
⚠️ Warning: High Cost of Payday Loans
A typical 2-week payday loan with a $15 fee per $100 equals an APR of 391%. This is extremely expensive compared to credit cards (15–25% APR) or personal loans (6–36% APR).
Payday Loan Calculator: Understand the True Cost Before You Borrow
What Is a Payday Loan?
A payday loan is a short-term, high-cost loan typically due on your next payday. These loans are usually for small amounts ($50–$1,000) and require minimal credit checks. While marketed as emergency solutions, they often trap borrowers in cycles of debt due to their exorbitant fees and interest rates.
How Payday Loan Fees Work
Lenders charge a flat fee per $100 borrowed—commonly $15 for a two-week loan. For example, borrowing $500 at $15 per $100 means you pay a $75 fee. You must repay $575 in just 14 days. This fee structure hides the true annualized cost, which our calculator reveals as the Annual Percentage Rate (APR).
Understanding APR on Payday Loans
The APR standardizes borrowing costs across loan types. A $15 fee on a 14-day $100 loan translates to:
($15 / $100) × (365 / 14) × 100 = 391% APR
This dwarfs credit card APRs (15–25%) and even high-interest personal loans (36% max under U.S. regulations). Many borrowers don’t realize they’re paying nearly 400% interest annually.
The Debt Trap Cycle
Over 80% of payday loans are rolled over or followed by another loan within 14 days (CFPB data). When borrowers can’t repay the full amount plus fees, they take out a new loan to cover the old one—adding more fees. This cycle can lead to paying hundreds or thousands in fees on a small initial loan.
State Regulations and Limits
Payday lending laws vary widely:
- Banned: Arizona, Arkansas, Connecticut, Georgia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont, West Virginia
- Strict caps: California ($300 max, max 15% fee), Montana (36% APR cap)
- Minimal regulation: Texas, Nevada, Ohio allow very high fees
Safer Alternatives to Payday Loans
If you need emergency cash, consider these lower-cost options:
- Credit union payday alternative loans (PALs): Up to $2,000 at 28% APR max, 1–12 month terms
- Payment plans: Ask creditors for extensions or hardship programs
- Side gigs: Apps like DoorDash, Uber, or TaskRabbit for quick cash
- Nonprofit assistance: Local charities, churches, or government programs
- Cash advance apps: Earnin, Dave, or Brigit (fees optional, no interest)
When Might a Payday Loan Be Justifiable?
In extremely rare cases—such as avoiding eviction or a critical car repair with no other options—a payday loan might prevent a larger financial disaster. However, it should be a last resort, and you must have a concrete plan to repay it in full on your next payday without rolling it over.
How to Avoid Payday Loan Debt
Build financial resilience with these strategies:
- Create a bare-bones emergency fund ($200–$500)
- Track every dollar using budgeting apps (Mint, YNAB)
- Set up overdraft protection from savings (not credit)
- Negotiate bills before they’re due
- Seek free credit counseling (NFCC.org)
Legal Protections for Borrowers
The Consumer Financial Protection Bureau (CFPB) enforces rules requiring lenders to:
- Disclose the total cost and APR clearly
- Not withdraw payments repeatedly if funds are insufficient
- Provide written repayment options
Conclusion
Payday loans are among the most expensive forms of consumer credit. Use this calculator to understand the shocking true cost before borrowing. In almost all cases, safer, cheaper alternatives exist. If you’re already in a payday loan cycle, contact a nonprofit credit counselor immediately to break free.
Frequently Asked Questions
A: The average fee is $15 per $100 borrowed for a two-week loan. This equals $75 on a $500 loan. However, fees range from $10 to $30 depending on state laws and the lender.
A: APR annualizes the fee. A $15 fee for 14 days seems small, but if you paid that every two weeks for a year (26 times), you’d pay $390 on a $100 loan—390% of the original amount. Hence, 391% APR.
A: No. Defaulting on a payday loan is a civil matter, not criminal. Lenders cannot have you arrested. However, they may sue you in civil court, which could lead to wage garnishment if they win.
A: It depends on your state and the lender’s licensing. Many online lenders operate illegally in states where payday lending is banned. Always verify the lender is licensed in your state through your Department of Financial Institutions.
A: Most states limit borrowers to one payday loan at a time. Some allow multiple, but this dramatically increases the risk of unmanageable debt. Never take out multiple payday loans simultaneously.
A: The lender will attempt to withdraw funds from your bank account. If it fails, you’ll incur overdraft fees. They may send the debt to collections, sue you, or offer a “rollover” (which adds more fees). Contact them immediately to discuss options.
A: Typically, no—if you repay on time. Most payday lenders don’t report to credit bureaus. However, if your debt goes to collections or you’re sued, it will severely damage your credit score.
A: Contact a nonprofit credit counselor (find one at NFCC.org). They can help you create a budget, negotiate with lenders, and access emergency assistance. In some cases, a small personal loan from a credit union can consolidate the debt at a lower rate.