Payday Loan Calculator
Calculate the true cost of payday loans including total repayment amounts, interest charges, and APR. Payday loans are expensive short-term loans that should be used as a last resort. This calculator helps you understand the high costs involved.
Cost Summary
Loan Amount:
$0.00
Total Repayment:
$0.00
Total Cost:
$0.00
Interest Analysis
Interest Rate:
0.00%
APR:
0.00%
Daily Rate:
0.00%
Rollover Impact
After 1 Rollover:
$0.00
After 2 Rollovers:
$0.00
After 3 Rollovers:
$0.00
Understanding Payday Loans
Payday loans are short-term, high-interest loans typically due on your next payday. While they provide quick cash, they come with extremely high costs that can trap borrowers in a cycle of debt. Understanding the true cost is crucial before considering this option.
How Payday Loans Work
Loan Process
- Apply online or in-person
- Provide proof of income
- Post-dated check or debit authorization
- Funds available same day
Repayment Terms
- Due on next payday
- 14-31 day terms typical
- Full amount due at once
- Can be extended (rolled over)
Cost Structure
- Flat fee per $100 borrowed
- $10-$30 per $100 typical
- No interest calculation
- Fee is the total cost
Risks Involved
- Debt cycle trap
- Bank account access
- Credit score damage
- Legal action possible
Payday Loan Costs and APR
| Loan Amount | Fee | Total Cost | APR | Daily Rate |
|---|---|---|---|---|
| $100 | $15 | $15 | 391% | 1.07% |
| $200 | $30 | $30 | 391% | 1.07% |
| $300 | $45 | $45 | 391% | 1.07% |
| $500 | $75 | $75 | 391% | 1.07% |
The Debt Cycle Trap
How Rollovers Create Debt Spirals
Initial Loan: $300 at $45 fee
- Receive: $300
- Repay: $345
- Cost: $45 (15% of amount)
- If can't repay: Rollover
After One Rollover
- Receive: $0 (just extension)
- Repay: $345 + $45 = $390
- Total cost: $90
- 30% of original amount
After Two Rollovers
- Receive: $0
- Repay: $390 + $45 = $435
- Total cost: $135
- 45% of original amount
After Three Rollovers
- Receive: $0
- Repay: $435 + $45 = $480
- Total cost: $180
- 60% of original amount
Legal Limits by State
States with Strong Protections:
- New York: 25% APR cap
- California: 36% APR cap
- Illinois: 36% APR cap
- Florida: 30% APR cap
- Texas: 10% per month cap
States with Weak/No Limits:
- Delaware: No APR limits
- South Dakota: No APR limits
- Idaho: No APR limits
- Wisconsin: Limited regulation
- Check your state's laws
Alternatives to Payday Loans
Better Options for Short-Term Cash Needs
Bank/Credit Union Options:
- Personal loans: Lower APR
- Credit card cash advance
- Overdraft protection
- Emergency savings
Community Resources:
- Credit unions
- Non-profit lenders
- Community action agencies
- Financial counseling
Government Programs:
- Unemployment benefits
- Food assistance programs
- Utility assistance
- Emergency aid programs
Other Strategies:
- Negotiate payment plans
- Sell unused items
- Part-time work
- Family/friend loans
APR Calculation for Payday Loans
APR Formula:
APR = (Fee / Loan Amount) × (365 / Term Days) × 100
- Annualizes the fee
- Shows true annual cost
- Required by law in some states
- Can exceed 1,000% APR
Example Calculation:
- $300 loan, $45 fee, 30 days
- Fee rate: $45/$300 = 15%
- Daily rate: 15% × (365/30) = 182.5%
- APR: 182.5% annual
When Payday Loans Make Sense
Rare Appropriate Uses:
- True emergency situations
- All other options exhausted
- Ability to repay in full
- Short-term bridge only
Red Flags to Avoid:
- Planning to rollover
- Cannot repay on payday
- Using for non-emergencies
- Multiple loans outstanding
Key Takeaways for Payday Loans
- Payday loans have extremely high APRs, often exceeding 300-500% annually
- The debt cycle trap can quickly turn a small loan into a large financial burden
- Always calculate the total cost and APR before taking a payday loan
- Look for alternatives like credit union loans or community resources first
- Never rollover a payday loan - find another way to repay it
- Check your state's laws for APR caps and consumer protections
- Payday loans should only be used for true emergencies when no other options exist
- Build an emergency fund to avoid needing high-cost short-term loans