Payday Loan APR Calculator
A Loan Calculator is an online tool to estimate the payday loan interest on the loan amount you may wish to borrow. Some terms that are referred to by various payday lenders are:
- The principal - the amount you want to borrow.
- Repayment term (Number of days) – the period within which you must repay your loan.
- APR (Annual Percentage Rate) - the annual rate that is charged for borrowing the loan. APR is expressed as a percentage that represents the actual annual cost of funds.
- The total cost - the money you have to pay for your loan, in total, including all fees.
How Is the Cost of a Payday Loan Calculated?
The formula used to calculate APR of a payday loan is based on the example below:
Divide the finance charge ($80) by the loan amount ($400)
Multiply the result (0.2) by the number of days in the year (365)
Divide the total (73) by the term of the loan in days (30)
Multiply the result (2.433) by 100 and add a percentage sign = 243.33%
What Should I Be Aware of While Using an Online Payday Loan Calculator?
- It’s only a representative model of loan calculation, and actual costs may vary.
- The loan cost is calculated on the basis of the information you provide.
- Do not make decisions about a loan based on the loan calculator solely. Take other factors into account.
- Using a calculator is not a factor in getting loan approval.
- Fees and rates are subject to change according to the state you live in.
- There may be additional fees such as a verification fee, documentation fee, etc., ask your lender before accepting a loan offer.
*Rules and regulations of financial charges for a payday loan vary by state. Learn about them and get cash advance from a licensed lender in your state.
How an Online Payday Loan Works
- You need to fill out an online request form. You need a valid identification proof, a recent paycheck, and bank account details.
- The loan amount can vary from $100 to $1,000, depending on the state you live in. If approved, you will get the money the next business day.
- Payment is due on your next payday, which usually is around two weeks.
- You can either give a post-dated personal check that coincides with your next paycheck or electronic access to withdraw funds from your bank account.
- Payday lenders usually charge fees of $15-$20 or more for every $100 borrowed.
Considerations When Taking Out a Payday Loan
- Affordability: Make sure that taking out a loan is what you need to do. Make sure that you can afford to make the repayments; only you know whether you are able to or not.
- Loan Security: Read the small print of your payday loan agreement carefully.
- Interest Rates/Fees: Carefully check the fees with your lender. Even though the fees may be low, the actual interest rate will be high. Payday loans are short, emergency loans and not meant to be paid over long periods of time.
- Borrow What You Need, Repay Quickly: Repay your loan on the due date, and borrow only what you need. The faster you repay your payday loan, the quicker you will get relief from the stress.