Payday Loan Calculator

Calculate interest costs, APR, and total repayment for short-term loans.

Estimate the true cost of payday loans including interest, fees, and APR. Understand the total amount you'll need to repay and make informed borrowing decisions.

Examples

Click on any example to load it into the calculator.

Standard 2-Week Payday Loan

Standard

Typical payday loan with $500 borrowed for 14 days at 15% interest.

Loan Amount: $500

Interest Rate: 15%

Loan Term: 14 days

Fees: $25

Frequency: 14 days

Emergency Cash Advance

Emergency

Quick $300 emergency loan for 7 days with higher interest rate.

Loan Amount: $300

Interest Rate: 20%

Loan Term: 7 days

Fees: $15

Frequency: 7 days

Monthly Payday Loan

Monthly

Larger $1000 loan for 30 days with standard fees.

Loan Amount: $1000

Interest Rate: 12%

Loan Term: 30 days

Fees: $50

Frequency: 30 days

High-Cost Short-Term Loan

High-Cost

Small $200 loan with high interest rate and fees.

Loan Amount: $200

Interest Rate: 25%

Loan Term: 10 days

Fees: $30

Frequency: 10 days

Other Titles
Understanding Payday Loan Calculator: A Comprehensive Guide
Master the fundamentals of payday loan calculations, understand APR, and make informed short-term borrowing decisions with our comprehensive guide.

What is a Payday Loan Calculator?

  • Core Concepts and Definitions
  • Why Payday Loan Calculations Matter
  • Types of Short-Term Loans
A Payday Loan Calculator is a specialized financial tool designed to help borrowers understand the true cost of short-term, high-interest loans. These calculators compute interest charges, fees, Annual Percentage Rate (APR), and total repayment amounts for loans that are typically due on the borrower's next payday. Understanding these costs is crucial for making informed decisions about emergency borrowing and avoiding debt traps.
The Fundamental Components of Payday Loan Calculations
Payday loan calculations involve several key components: the principal amount borrowed, the interest rate (often expressed as a flat rate per period), the loan term (usually 7-30 days), and any additional fees. Unlike traditional loans, payday loans typically use simple interest calculations rather than compound interest, but the APR can be extremely high due to the short loan terms. The calculator helps borrowers see the true cost of borrowing expressed as an annual rate.
Different Types of Short-Term Loans and Their Characteristics
Various short-term loan products have different calculation methods and fee structures. Traditional payday loans are typically due in full on the next payday (14 days). Installment payday loans allow repayment over multiple periods. Cash advances from credit cards may have different fee structures. Title loans use vehicle equity as collateral. Each type requires specific calculation approaches to provide accurate cost estimates and APR calculations.
The Mathematical Foundation: Simple Interest and APR
The calculator uses simple interest formulas: Interest = Principal × Rate × Time, where time is expressed as a fraction of a year. The APR calculation converts the short-term cost to an annual rate: APR = (Total Finance Charge / Principal) × (365 / Loan Term in Days) × 100. This standardized measure allows borrowers to compare the true cost of different loan products regardless of their terms.

Key Payday Loan Terms Explained:

  • Principal: The original amount borrowed, excluding interest and fees
  • Interest Rate: The percentage charged for borrowing money over the loan period
  • APR: Annual Percentage Rate, the standardized measure of loan cost
  • Finance Charge: The total cost of borrowing including interest and fees

Step-by-Step Guide to Using the Payday Loan Calculator

  • Data Collection and Preparation
  • Input Methodology
  • Result Interpretation and Analysis
Maximizing the value of the Payday Loan Calculator requires accurate data input, understanding of loan terms, and careful interpretation of results. Follow this comprehensive methodology to ensure your calculations provide reliable estimates for financial planning and decision-making.
1. Gather Accurate Loan Information
Collect precise information about the payday loan offer: the exact loan amount you need, the interest rate charged for the loan period, the number of days until repayment is due, and any additional fees (application fees, processing fees, etc.). For existing loans, gather your current balance, interest rate, remaining term, and any fees you've already paid. Accuracy in these inputs is crucial—small differences in rates or terms can significantly impact total costs.
2. Input Data with Precision
Enter the loan amount as the total you want to borrow. Input the interest rate as a percentage for the loan period (e.g., 15 for 15% per period). Specify the loan term in days (typically 7, 14, or 30 days). Include any additional fees charged by the lender. Set the payment frequency to match how often interest is calculated (usually the same as the loan term for single-payment loans).
3. Analyze Results Comprehensively
Review all calculated results: total interest charges, total fees, total repayment amount, and most importantly, the APR. The APR is the key metric for comparing loan costs. Consider how these costs fit into your budget and whether you can afford the total repayment amount. Compare the APR with other borrowing options like credit cards, personal loans, or borrowing from friends and family.
4. Plan for Repayment and Alternatives
Consider how you'll repay the loan and what happens if you can't pay on time. Many payday loans have rollover fees that can quickly escalate costs. Explore alternative sources of emergency funds: emergency savings, credit unions, community assistance programs, or negotiating payment plans with creditors. Plan for how this loan affects your overall financial situation.

Loan Comparison Framework:

  • Compare APR across different payday loan providers and terms
  • Calculate total repayment amounts to understand true borrowing costs
  • Evaluate how loan terms affect total interest and fees
  • Assess the impact of additional fees on overall loan cost

Real-World Applications and Financial Planning

  • Emergency Fund Planning
  • Debt Management Strategies
  • Alternative Financing Options
The Payday Loan Calculator serves as a critical tool for understanding the true cost of short-term borrowing and making informed financial decisions during emergencies or cash flow challenges.
Emergency Fund Planning and Prevention
Understanding payday loan costs can motivate building emergency savings. The calculator shows how expensive these loans are compared to having savings available. A $500 payday loan at 15% for 14 days costs $75 in interest plus fees, while $500 in savings earns interest instead of costing money. This comparison helps prioritize emergency fund building and shows the true value of financial preparedness.
Debt Management and Avoidance Strategies
For individuals already using payday loans, the calculator helps understand the debt cycle and plan escape strategies. It shows how rollover fees compound the problem and helps calculate the total cost of repeated borrowing. This information is crucial for developing debt payoff plans and avoiding the payday loan trap that can lead to long-term financial problems.
Alternative Financing and Community Resources
The calculator helps evaluate payday loans against alternatives like credit union loans, community development financial institutions (CDFIs), employer advances, or payment plans with creditors. By showing the true cost of payday loans, it encourages exploring lower-cost options. Many communities have resources and programs designed to help people avoid high-cost borrowing.

Financial Planning Scenarios:

  • Emergency car repair: Compare payday loan vs. credit card vs. savings
  • Medical bill payment: Evaluate loan costs vs. payment plan options
  • Utility bill assistance: Compare loan costs vs. community assistance programs
  • Rent payment: Assess loan costs vs. landlord payment arrangements

Common Misconceptions and Correct Methods

  • APR vs. Interest Rate Confusion
  • Rollover Fee Calculations
  • Regulatory Considerations
Understanding payday loan calculations requires dispelling common misconceptions and learning the correct methods for evaluating these financial products.
APR vs. Interest Rate: Understanding the Difference
Many borrowers confuse the periodic interest rate with the APR. A 15% interest rate for a 14-day loan doesn't mean 15% APR—it actually translates to approximately 391% APR when annualized. The calculator shows both rates to help borrowers understand the true cost. The APR is the standardized measure that allows comparison across different loan products and terms.
Rollover Fees and the Debt Cycle
Many payday loan borrowers don't understand how rollover fees work. When a loan can't be repaid on time, lenders often offer to 'roll over' the loan for an additional fee. These fees compound quickly, and the calculator can show the escalating costs of multiple rollovers. Understanding this helps borrowers avoid the debt trap and seek alternatives before costs become unmanageable.
Regulatory Considerations and Consumer Protection
Payday loan regulations vary by state and country, affecting maximum loan amounts, interest rates, and rollover limits. The calculator helps borrowers understand their rights and the legal limits on loan costs. Some jurisdictions have implemented cooling-off periods, payment plans, or other consumer protections that can affect loan calculations and total costs.

Regulatory Framework Examples:

  • State-specific interest rate caps and their impact on loan costs
  • Cooling-off period requirements and their effect on borrowing patterns
  • Payment plan options and how they reduce total costs
  • Consumer protection laws and their influence on loan terms

Mathematical Derivation and Examples

  • Simple Interest Formula
  • APR Calculation Methods
  • Fee Impact Analysis
The mathematical foundation of payday loan calculations involves understanding simple interest, APR conversion, and the impact of fees on total borrowing costs.
Simple Interest Formula and Application
The basic formula for payday loan interest is: I = P × r × t, where I is interest, P is principal, r is the periodic interest rate (as a decimal), and t is time in years. For a 14-day loan, t = 14/365. This simple interest approach differs from compound interest used in traditional loans, but the short terms and high rates still result in significant costs.
APR Calculation and Standardization
The APR calculation standardizes loan costs: APR = (Total Finance Charge / Principal) × (365 / Loan Term in Days) × 100. This converts the short-term cost to an annual rate for comparison. For example, a $500 loan with $75 interest for 14 days has an APR of ($75/$500) × (365/14) × 100 = 391%. This standardized measure helps borrowers compare costs across different loan products.
Fee Impact and Total Cost Analysis
Additional fees significantly impact total borrowing costs. A $25 fee on a $500 loan increases the total cost by 5% of the principal. When calculating APR, fees are included in the total finance charge. The calculator shows both the interest cost and total cost including fees, helping borrowers understand the complete financial impact of their borrowing decision.

Calculation Examples:

  • Simple interest calculation: $500 × 15% × (14/365) = $2.88 daily interest
  • APR calculation: ($75 interest + $25 fees) / $500 × (365/14) × 100 = 521%
  • Total repayment: $500 principal + $75 interest + $25 fees = $600
  • Daily cost: $100 total cost / 14 days = $7.14 per day