What is a Payday Loan Calculator?
A payday loan is a small, short-term cash advance that is typically repaid on your next payday. While the fee may look small in dollar terms, the very short term makes the effective annual cost extremely high. This calculator shows you both the total amount you must repay and the effective APR (annual percentage rate), so you can compare the true cost against other forms of credit.
How to use it
Enter three numbers: the loan amount (principal) you intend to borrow, the total fee or finance charge the lender applies, and the loan term in days (often around 14 days). The calculator instantly returns the total repayment and the annualized APR.
The formula explained
The total repayment is simply Principal + Fee. The effective APR takes the fee as a fraction of the principal, then scales it up to a full year using the ratio 365 / Days, and converts to a percentage: $$\text{APR} = \frac{\text{Fee}}{P} \times \frac{365}{\text{Days}} \times 100$$ Because payday terms are short, dividing 365 by a small number of days produces a large multiplier.
Worked example
Borrow $500 with a $75 fee for 14 days. Total repayment = \(500 + 75 =\) $575. APR: $$\text{APR} = \frac{75}{500} \times \frac{365}{14} \times 100 = 0.15 \times 26.07 \times 100 \approx 391.07\%$$ The $75 fee equates to nearly 400% APR — far higher than a typical credit card.
FAQ
Why is the APR so high? APR annualizes a cost that you only pay for a couple of weeks, so a modest fee becomes a large percentage when stretched over a full year.
Does this include rollovers? No. This models a single loan term. Rolling the loan over repeatedly adds new fees and dramatically increases the total cost.
Is the fee the same as interest? Lenders often state a flat fee rather than interest. This calculator treats the entire fee as the cost of borrowing for the term.
