Payday Loan Calculator – NerdWallet

1. Enter your loan amount. Payday loans are typically $500 or less, but some lenders offer larger amounts. Try to borrow only the amount you need to avoid paying unnecessary fees.

2. Add up the fees. Payday lenders usually charge a flat fee of $10 to $30 for every $100 borrowed on your first loan. A lender may also charge fees for rolling over the loan, late payments and having the money loaded onto a prepaid debit card (more on fees below).

3. Enter your repayment term. Payday loan terms are usually between two weeks and a month.

Once you select “Calculate,” you’ll be shown the loan’s annual percentage rate (APR), which reflects the annualized cost of a loan.

Though payday loan terms are much shorter than a year, APR is a nearly universal expression for the cost of borrowing — credit cards, personal loans, mortgages and auto loans all use APR. This makes it the best apples-to-apples cost comparison tool. You can see your payday loan’s APR and compare it to your car loan’s APR, for example. The lower this number, the cheaper the loan.

Payday lenders, like all lenders, are required by law to show you a loan’s annual percentage rate before providing a loan.

To calculate a payday loan APR, divide the total fees paid by the amount borrowed. Then, multiply that number by 365. Divide that number by the number of days you have to repay the loan and multiply the result by 100.

Here’s the formula to calculate a payday loan APR:

(((fees / loan amount) x 365) / repayment term) x 100

Here’s a step-by-step APR calculation example for a $300 payday loan that costs $45 in fees and is repaid in 14 days.

1. Divide the total fees by the amount borrowed: 45 / 300 = 0.15

2. Multiply that number by 365: 0.15 x 365 = 54.75

3. Divide that number by the repayment term in days: 54.75 / 14 = 3.91

4. Multiply the result by 100: 3.91 x 100 = 391%

Payday loan fees vary by state, but here are five common fees.

• Fee for borrowing money. This is a flat fee that the lender charges to all customers. It’s just like interest on any other loan — it’s the cost of borrowing.

• Late fees. If you miss your payday loan due date, the lender may charge a small late fee.

• Rollover fee. If you can’t repay the loan by its due date, some lenders offer to roll over or refinance your payday loan to one with a longer term. If you refinance before the due date, you could avoid a late fee, but the fee to refinance may be as high as the initial fee. If the first fee was $45, the rollover fee may be $45.

• NSF fee. Storefront payday lenders often require borrowers to leave a post-dated personal check that they cash on the due date. Some lenders ask for access to your bank account so they can withdraw the money directly. In either case, if you don’t have the funds when the lender tries to take repayment, you may be charged a non-sufficient funds fee.

• Prepaid debit card fee. According to the CFPB, if the payday loan funds are added to a prepaid debit card, you may be charged a fee for checking your balance, calling customer service, using the card or having the funds loaded onto it.

Payday lenders’ high fees and short repayment terms make payday loans difficult to repay on time, which is why most financial experts and consumer advocates recommend not getting one.

Before you get a payday loan, consider these low- and no-cost alternatives.

• Family loan: Though it may be difficult to ask, consider borrowing the money from a trusted friend or family member. You can draw up a contract that details the amount borrowed, what the funds will be used for and how the funds will be repaid. This can be a low-cost way to borrow the money without any impact to or consideration of your credit score.

• Payment plans: If you’re struggling to make a rent, utility, loan or medical bill payment, you may be able to set up a payment plan to break it up. Check into an interest-free payment plan with your utility company, lender or physician’s office. If you’re struggling to pay rent, you may have to reach out to your landlord directly.