Payday Loan APR Calculator
Convert a flat payday-loan fee into a true annual percentage rate (APR) and see the eye-watering cost of short-term borrowing.
How it works
Period rate = fee ÷ amount · APR = period rate × (365 ÷ term days) × 100
A payday loan’s flat fee looks small until you annualize it. Because the loan lasts only a couple of weeks, that fee is charged over and over across a year, so a "$15 per $100" fee translates into a triple-digit APR. Converting the fee to an APR puts payday loans on the same scale as credit cards (typically 15–30%) and reveals just how expensive rolling one over repeatedly becomes.
Worked example
Borrow $300 with a $45 fee for 14 days. The period rate is 45 ÷ 300 = 15%; annualized that is 15% × (365 ÷ 14) ≈ 391% APR. You repay $345 in two weeks.
Frequently asked questions
Why is the APR so high?
The fee is small in dollars but covers only a two-week loan. Annualizing it — as APR does for every loan — repeats that charge about 26 times a year, producing rates that commonly exceed 300–400%.
What does "$15 per $100" mean as APR?
On a typical 14-day term, a $15 fee per $100 borrowed is a 15% period rate, which annualizes to roughly 391% APR. Longer terms lower the APR; rollovers raise the effective cost even further.
How is this different from a credit card?
Credit cards charge interest that accrues daily at APRs usually between 15% and 30%. Payday loans charge a fixed fee over a very short term, which converts to a far higher APR — and rolling them over compounds the cost quickly.
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Educational estimate, not financial or legal advice.