Finance
Payday Loan Cost Calculator
See the real cost of a payday loan: the fee, the annualized APR (often 300% to 500%+), what rollovers add, and how much you would save on a credit card at 24% APR instead.
Payday loan cost
$15 per $100 is the CFPB benchmark and many states' cap.
14 days is the typical pay-cycle term.
Each rollover charges the same fee again on the same principal.
Total amount due
$575.00
Fee on the original loan
$75.00
Effective APR
391.1%
Cost vs. credit card
16.3x
Predatory loan. The CFPB classifies sustained APRs in this band as the core of the payday debt trap. Most borrowers in this range end up paying more in fees than they originally borrowed.
Same loan on a 24% APR credit card
Interest cost over the same window
$4.60
You would pay this much less
$70.40
Comparison holds your principal at a 24% APR for the same total days, simple interest. A real card balance amortizes, but the gap is rarely close.
Frequently Asked Questions about the Payday Loan Cost Calculator
Why is the APR on a payday loan so high?
Payday lenders quote a flat fee per $100 borrowed, not an interest rate, and the $15 sounds cheap because the term is short. Annualize it and the math is brutal: $15 on a $100 14-day loan is a 15% fee per two-week period, which works out to 0.15 x (365 / 14) = 391% APR. The CFPB has used that 391% figure as the canonical example for years. APR exists precisely so you can compare a two-week loan to a 30-year mortgage on equal footing, and on that footing payday loans are roughly 25 to 50 times more expensive than a typical credit card.
What did the CFPB do about payday loan fees?
The Consumer Financial Protection Bureau finalized a Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule in 2017, which would have required lenders to verify a borrower's ability to repay before issuing a loan. The ability-to-repay underwriting piece was rescinded by the CFPB in 2020, though the payment-withdrawal restrictions (limiting how many times a lender can hit your bank account) remain in effect. There is no federal cap on the per-$100 fee, so the $15-per-$100 figure is an industry benchmark, not a federal law. Several states have written it into their own usury statutes as the explicit ceiling.
Why are rollovers so dangerous?
A rollover means you pay another fee to extend the loan without reducing the principal you owe. Roll a $500 loan with a $75 fee just four times and you have paid $375 in fees on top of still owing the original $500, so a borrower in the standard debt cycle pays back $875 on a $500 advance. CFPB research found that about 80% of payday loans are rolled over or reborrowed within two weeks, and the median borrower ends up taking out 10 loans in a year. Total fees often exceed the original principal long before the debt is actually cleared.
Which states cap or ban payday loans?
About 18 states plus DC effectively ban payday lending through usury caps, including New York, New Jersey, Connecticut, Massachusetts (where the cap is 23% APR), Maryland, Vermont, Pennsylvania, North Carolina, Georgia, West Virginia, and Arizona. Other states allow payday loans but cap the fee, often at the $15-per-$100 benchmark or a stated APR ceiling such as Colorado's 36%. The remaining states permit fees well above that, and a handful (Texas, Idaho, Nevada, Utah) have effectively no cap at all. The 2006 Military Lending Act caps loans to active-duty service members and their dependents at 36% APR everywhere in the country.
What are cheaper alternatives to a payday loan?
Three options usually beat a payday loan by a wide margin. Credit-union Payday Alternative Loans (PALs) are capped at 28% APR under NCUA rules, lend $200 to $2,000 over one to twelve months, and are designed specifically to replace storefront payday loans. Many employers now offer earned-wage access through services like DailyPay or PayActiv that let you draw already-earned wages early for a flat fee of a few dollars. A credit-card cash advance, even at the typical 25 to 29% APR plus a 3 to 5% upfront fee, is still cheaper than a 391% APR payday loan over a two-week window. Asking family or friends for a short-term loan, or negotiating a payment plan with the creditor you are trying to pay, costs nothing at all.