Payday Loan Calculator

What this calculator does

This payday loan calculator converts the flat fee a lender charges into the annual percentage rate that lets you compare it against any other form of credit. Enter the amount borrowed, the finance fee, and the term in days, and it returns the effective APR, the fee for that single loan, and what the borrowing would cost across a year if you kept rolling it over.

The conversion is the point. Payday lending is sold in fee terms because a $60 charge sounds modest, while the same transaction expressed as an APR sounds like what it is. Regulation Z requires the APR to be disclosed for exactly this reason, and the annualized figure is the one that makes the comparison honest.

When to use it

Use it before signing, in the ten minutes it takes to check whether a cheaper option exists. Comparing the calculated APR against a credit union payday alternative loan at 28 percent, or even a credit card cash advance at 29 percent, usually settles the question immediately.

The rollover figure is the more important output. Most payday borrowers do not take one loan; the CFPB has found that the majority of loan volume comes from borrowers with more than ten loans a year. Seeing the annual cost of that cycle in dollars, rather than as a fee per period, is often what breaks it. If you are already several loans in, run the annual figure and take it to a non-profit credit counselor.

Understanding the inputs

Loan amount is the cash you receive, not the amount of the check you write. Finance fee is the total charge, which is usually quoted per hundred dollars borrowed — $15 per $100 is the common structure, and state law often caps it.

Loan term in days is what drives the annualization. Payday loans are typically written to your next payday, so 14 days is standard and anything from 7 to 31 days is common. A shorter term with the same fee produces a higher APR, which is why a one-week loan at the same fee is twice as expensive in annual terms as a two-week one.

How is this calculated?

APR = (Fee / Loan Amount) × (365 / Days) × 100. Total Repayment = Loan Amount + Fee.

A worked example

Take a $400 loan with a $60 fee due in 14 days. That fee is 15 percent of the amount borrowed for a fortnight. Annualized, it is 391 percent APR, and the total repayment is $460 on payday.

The problem is what happens if $460 leaving your account creates the same shortfall next payday. Rolling the loan over for a full year at that fee costs about $1,564 in charges on a $400 principal you never reduce — nearly four times the amount borrowed. A credit union PAL of $400 at 28 percent over six months would cost roughly $32 in interest plus a $20 application fee.

Limitations and assumptions

The calculator models a single-period loan with one fee and no rollovers, which describes the product as advertised rather than as commonly used. It does not include returned-payment fees, bank overdraft charges triggered by a failed ACH debit, late fees, or the cost of collections if the debt is sold on.

It also cannot capture what makes payday lending expensive in practice: the sequence of loans rather than the single transaction. If you are considering one, the more useful exercise is the annual rollover figure. If you are already in the cycle, free help from an NFCC-affiliated credit counseling agency will do more than any calculator.