Daily Payment Loan Calculator (True APR)
Work out the real annual interest rate of a loan repaid in daily installments — informal “gota a gota” loans, daily-collection microloans and cash advances — with the total repaid, the cost and the effective annual rate.
How it works
Per-payment rate i solves P = d × [1 − (1 + i)⁻ᴺ] ÷ i · days per payment L = 7 ÷ collection days a week · APR = i × 365 ÷ L · effective annual rate = (1 + i)^(365 ÷ L) − 1
“20% for the month” sounds modest, but when the principal is repaid in daily installments you have the full amount for only a few days, so the true annual rate is enormous. The calculator finds the per-payment rate that matches the cash you receive to the stream of daily payments — the internal-rate-of-return method behind every legal APR disclosure — and annualizes it. Informal daily-collection lenders (known in Latin America as “gota a gota”) routinely exceed 200–1,000% a year and often use threats to collect; use this as a warning tool and look for regulated microcredit, a cooperative or a credit union instead.
Worked example
A lender hands over 1,000 and collects 50 every day except Sunday for 24 payments — 1,200 in total over 28 days. The 200 cost looks like “20%”, but the per-payment rate that matches 24 payments of 50 to 1,000 is about 1.5%, which annualizes to 473.38% APR (an equivalent monthly rate near 48%, and over 10,000% compounded). That is predatory by any regulated standard.
Sources: CFPB — What is a payday loan? · Wikipedia — Annual percentage rate
Frequently asked questions
Why is the APR so much higher than the “20%” the lender quotes?
The quoted percentage is the cost over a few weeks, not per year, and it is charged on the whole loan even though you repay part of it every day. Annualizing and accounting for the shrinking balance turns 20% over four weeks into several hundred percent a year.
Is a gota a gota loan legal?
In most countries no: these are unlicensed lenders charging above the legal usury limit, often with violent collection. Report them to the police or the financial regulator and seek a regulated microfinance institution, cooperative or credit union.
What counts as a “normal” rate?
Regulated consumer loans typically run from about 10% to 36% APR; payday and some microloans go far higher. Anything in the hundreds of percent is predatory.
Does it matter whether payments are collected on Sundays?
Yes. Fewer collection days per week stretch the same number of payments over more calendar days, which lowers the annualized rate a little.
Related calculators
Estimates for education and planning, not financial advice. Lenders’ contracts, fees, day-count and rounding rules differ — check the official cost disclosure (APR / TAE / CAT) in your loan or card agreement before deciding.