Tool · Payday and short-term loans

What does this payday loan really cost?

A payday loan is priced by a fee, not a rate: so many dollars for every $100, due in one payment in a couple of weeks. Enter the amount, the fee and the days to see the APR, what renewing it costs, and what the same amount would cost as an ordinary installment loan. It works the same way for a title loan, a pawn loan or a cash advance.

Reviewed 3 October 2026 · Method: fee-based short-term loans · Example values are fictional

Before you borrow

Ask whoever you owe for a payment plan or a later due date. Utilities, landlords, hospitals and many lenders have one.
Call 211 or visit 211.org for local help with rent, utilities and food.
Ask a federal credit union about a payday alternative loan (a "PAL"): $200 to $2,000, one to twelve months, with the rate capped at 28%.

Result

$500.00 for 14 days at $15.00 per $100, renewed 3 times.

This loan costs $75.00 for 14 days: an APR of 391.07%.Renewed 3 times, you pay $300.00 in fees over 56 days and still have to repay the $500.00. The same amount at 28% over 3 months would cost $23.51 in interest.

Paid off on the due date

14 days · one payment

Fee: $75.00
You repay: $575.00
APR: 391.07%

+$51.49 more

Renewed 3 times

56 days · the fee paid 4 times

Fees paid: $300.00
Paid in all: $800.00
Still owed until the end: $500.00

+$276.49 more

Each renewal charges the fee again and takes nothing off the loan

For comparison: 28% over 3 months

an installment loan for the same amount

Monthly payment: $174.50
Interest: $23.51
APR: 28%

Lowest cost

Federal credit unions can offer payday alternative loans capped at 28%

This loan costs $75.00 for 14 days: an APR of 391.07%. Renewed 3 times it costs $300.00 in fees over 56 days. An installment loan for the same $500.00 at 28% over 3 months would cost $23.51.

Show the math

Fee for one term      = $500.00 ÷ 100 × $15.00 = $75.00
You repay             = $500.00 + $75.00 = $575.00 in 14 days
APR                   = fee ÷ amount × 365 ÷ days = $75.00 ÷ $500.00 × 365 ÷ 14 = 391.07%

Renewed 3 times
  Fees paid           = $75.00 × 4 = $300.00
  Paid in all         = $500.00 + $300.00 = $800.00 over 56 days

Comparison: $500.00 at 28% over 3 months
  Payment             = $174.50 a month
  Interest            = $23.51;  paid in all = $523.51

Questions to ask the lender

What is the finance charge in dollars and the APR on this loan? I worked out $75.00 and 391.07%.
If I cannot pay $575.00 on the due date, can the loan be renewed, how many times, and what does each renewal cost?
Do you offer an extended payment plan, what does it cost, and by when do I have to ask for it?
Will you take the payment from my bank account automatically? On what date, and can I change it?
If a payment fails, what do you charge, and how many times will you try my account?
Is there any charge for paying the loan off early or paying part of it?

Assumptions and limits

The loan is repaid in one payment on the due date. Each renewal pays the fee only and leaves the full amount owed, which is how a rollover works.
The APR is the fee as a simple yearly rate: fee ÷ amount × 365 ÷ days. It is the figure a single-payment loan discloses, and it does not compound.
The comparison is an ordinary installment loan for the same amount at the rate and term you enter. It is arithmetic, not an offer; whether you can get such a loan depends on the lender.
Bank fees for a failed payment, late fees and collection costs are not included. They can add a lot.
Fees, renewals and payment plans are set by state law and by the lender. Your loan agreement is the authoritative figure.

Stories on this

One-minute stories on payday loans, rollovers, title loans, cash-advance apps and overdrafts: Payday and short-term loans.

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