Payday Loan Calculator
A payday loan calculator is a tool that helps borrowers understand the true costs of payday loans. Payday loans are short-term, high-interest loans that are typically due on the borrower's next payday. These loans often have extremely high annual percentage rates (APRs) and can trap borrowers in cycles of debt.
Payday Loan: Paying Back a Fixed Amount Periodically
Use this calculator for basic calculations of payday loans, or click the links for more detail on each.
Payday Loan with Rollover: Paying Back a Lump Sum Due at Loan Maturity
Payday Loan with Multiple Rollovers: Predetermined Amount Due at Loan Maturity
Use this calculator to compute the initial value of a payday loan based on a predetermined face value to be paid back at loan maturity.
Payday Loan: Fixed Amount Paid Periodically
Payday loans are short-term, high-interest loans that are typically due on the borrower's next payday, usually within two to four weeks. These loans are often used by borrowers who need quick cash to cover immediate expenses but may not have access to traditional credit.
Payday Loan with Rollover: Single Lump Sum Due at Loan Maturity
When borrowers cannot repay a payday loan by the due date, they may roll over the loan by paying only the fees and extending the due date. This practice significantly increases the total cost of the loan and can trap borrowers in cycles of debt.
Payday Loan with Multiple Rollovers: Predetermined Lump Sum Paid at Loan Maturity
Some borrowers roll over payday loans multiple times, significantly increasing the total amount owed. Each rollover adds additional fees and interest, making these loans extremely expensive over time.
Payday Loan Basics for Borrowers
Interest Rate
Payday loans typically have extremely high annual percentage rates (APRs), often ranging from 300% to 600% or more. These high rates make payday loans one of the most expensive forms of borrowing.
Loan Term
Payday loans typically have very short terms, usually two to four weeks. The short term combined with high fees can make these loans difficult to repay on time.
Fees
Payday loans typically charge a fixed fee per $100 borrowed, such as $15 to $30 per $100. This fee structure can result in extremely high effective interest rates.
Disadvantages of Payday Loans
- Extremely High Costs: APRs often exceed 400%
- Debt Cycle: Many borrowers roll over loans multiple times
- Short Terms: Difficult to repay on time for many borrowers
- Target Vulnerable: Often marketed to low-income borrowers
- Aggressive Collection: Some lenders use aggressive collection practices
Payday loans should be avoided whenever possible due to their extremely high costs and potential to trap borrowers in cycles of debt. Borrowers facing financial emergencies should consider alternatives such as personal loans, credit union payday alternative loans, or assistance programs.