Payday Loan — Smart Financial Analysis
Use this calculator to analyze payday loan and make smarter financial decisions with real-time calculations and visual charts.
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A short-term, high-cost loan typically for $500 or less, due on your next payday. A typical $15 per $100 fee equals 391% APR. When you can't repay, lenders allow extending the loan for another fee. Most payday lenders don't report to credit bureaus.
Ready to run the numbers?
Why: A short-term, high-cost loan typically for $500 or less, due on your next payday. The average payday loan is $375 with a $56 fee for a 2-week term, equivalent to 400% APR.
How: Enter Loan Amount ($), Fee per $100 ($), Loan Term (days) to get instant results. Try the preset examples to see how different scenarios affect the outcome, then adjust to match your situation.
Run the calculator when you are ready.
📋 Quick Examples — Click to Load
📊 Cost Breakdown
Principal, initial fee, and rollover fees
📊 APR Comparison
Payday vs credit card vs personal loan vs PAL
🍩 Principal vs Fees
Cost split between principal and total fees
📈 Total Cost vs Rollovers
How total cost increases as rollovers increase (0-8)
For educational purposes only — not financial advice. Consult a qualified advisor before making decisions.
💡 Money Facts
Payday Loan analysis is used by millions of people worldwide to make better financial decisions.
— Industry Data
Financial literacy can increase household wealth by up to 25% over a lifetime.
— NBER Research
The average American makes 35,000 financial decisions per year.
— Cornell University
Globally, only 33% of adults are financially literate, making tools like this essential.
— S&P Global
Payday loans are one of the most expensive forms of borrowing, with average APRs exceeding 400%. Over 12 million Americans use payday loans annually, paying $9 billion in fees. The average borrower takes out 8 loans per year and spends 5 months in debt. Understanding the true cost is the first step to avoiding the payday loan debt trap.
Sources: Consumer Financial Protection Bureau (CFPB), Pew Charitable Trusts, Federal Reserve, National Conference of State Legislatures.
Key Takeaways
- • Total Repayment = Principal + Fee (initial fee + rollover fees)
- • APR = (Fee / Principal) × (365 / Loan Term Days) × 100
- • A $15 per $100 fee on a 14-day loan equals ~391% APR
- • Each rollover adds another full fee — costs compound quickly
Did You Know?
How Do Payday Loans Work?
Fee Structure
Fees are typically quoted as "$X per $100 borrowed." A $15/100 fee on $300 = $45. You owe $345 on your next payday. Lenders often present fees in a way that obscures the true annual cost — a $45 fee sounds small until you annualize it.
Rollovers
If you can't repay, you pay another fee to extend. Each rollover adds the same fee again. A $300 loan with $60 fee rolled over 3 times = $300 + $240 = $540 total. The CFPB found that 80% of payday loans are rolled over within 14 days, creating a debt cycle.
APR Calculation
APR = (Total Fees / Principal) × (365 / Term in Days) × 100. A $45 fee on $300 for 14 days = (45/300) × (365/14) × 100 ≈ 391% APR. Compare that to a credit card at 25% or a personal loan at 15%.
Expert Tips
Cost Comparison by Loan Type
The same $300 borrowed for 14 days costs dramatically different amounts depending on the loan type. Payday loans are 15-40x more expensive than mainstream alternatives.
| Loan Type | Typical APR | $300 for 14 Days |
|---|---|---|
| Payday Loan | 391% | ~$45 fee |
| Credit Card Cash Advance | 25-30% | ~$3 fee |
| Personal Loan | 10-20% | ~$2 fee |
| Credit Union PAL | 28% max | ~$3 fee |
Frequently Asked Questions
What is a payday loan?
A short-term, high-cost loan typically for $500 or less, due on your next payday. The average payday loan is $375 with a $56 fee for a 2-week term, equivalent to 400% APR.
How much do payday loans really cost?
A typical $15 per $100 fee equals 391% APR. Borrowers pay an average of $520 in fees annually. Rolling over a $300 loan 8 times costs $360 in fees alone.
What is a loan rollover?
When you can't repay, lenders allow extending the loan for another fee. 80% of payday loans are rolled over within 14 days, trapping borrowers in debt cycles.
Are payday loans legal?
Varies by state. 18 states plus DC effectively ban payday lending. Others cap rates or fees. The CFPB regulates at the federal level.
What are alternatives to payday loans?
Credit union payday alternatives (PALs) at 28% max APR, payment plans with creditors, employer advances, community assistance programs, and personal loans from banks.
How do payday loans affect credit?
Most payday lenders don't report to credit bureaus. However, defaulted loans sent to collections will damage your credit score significantly.
Key Statistics
Official Data Sources
⚠️ Disclaimer: This calculator is for educational purposes only. Payday loans carry extreme costs and debt trap risks. Not financial advice. Explore credit union PALs, payment plans, and community assistance before considering a payday loan.
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