What is the APR on a payday loan?

On the default here — 300 for fourteen days at 15 per 100 — it is 391.1%. The fee is 45, which is 15% of the principal, and fourteen days fits into a year 26.07 times, so the annualised rate is 15% × 26.07. It is a nominal annual rate with no compounding, which is how the regulation defines it, and it is the only figure that can be compared with a credit card or a personal loan.

Why does the APR not change when I roll the loan over?

Because it is already annualised. The APR measures the price of the money per period, multiplied out to a year, and a rollover is another period at the same price — so the rate is the same whether you roll once or five times. What changes is the money: five rollovers take the total fees from 45 to 270, and the amount you owe at the end from 345 to 570.

How much does rolling over actually cost?

One more fee each time. On 300 at 15 per 100, each rollover adds 45, so five rollovers cost 270 in fees in total — 90% of what you borrowed — and you still owe the original 300 at the end. Put next to the 45 you would have paid by simply repaying it on the first payday, the rollovers are the whole cost of the loan.

Is the APR the same thing as the interest rate?

No. The interest rate is what the lender charges per period — here 15% per fourteen days, which is the fee per 100. The APR is that rate converted into a yearly figure so that products with different periods can be compared. 15% per period is manageable-looking; 391.1% a year is the same fact told in a unit that makes the comparison honest.

Why does a thirty-day loan show a lower APR than a fourteen-day one?

The same 45 fee now buys twice as long, so the year contains 12.17 such periods instead of 26.07, and 15% × 12.17 is 182.5% rather than 391.1%. The cash cost did not change at all: the finance charge is still 45 and the amount due is still 345. Only the annualised rate moved, which is the point of annualising — it measures the price of the money, not its size.

Payday Loan Calculator

Result

45.00

Finance charge

Annualised rate (APR): 391.1%
Due at the end of the term: 345.00
Periods of this length in a year: 26.07
Total fees including rollovers: 45.00
Fees as a share of the principal: 15.0%

A payday loan calculator prices a very short loan the way it is actually sold: a fee per 100 borrowed, a term measured in days, and the option to roll the whole thing over instead of repaying it. Enter the amount, the fee the lender charges per 100, the term in days and how many times you expect to roll it over, and the page returns the finance charge, the total due at the end of the term, the fee as a share of what you borrowed, and the annual percentage rate. On the default — 300 borrowed at 15 per 100 over fourteen days — the finance charge is 45, so 345 is due at the end of the two weeks, and the APR is 391.1%. That last figure surprises people, and it is not an exaggeration: fifteen dollars on three hundred dollars is 15% for a fourteen-day period, and there are 26.07 such periods in a year, which is how the rate is annualised. The number worth understanding is what a rollover does and does not change. Roll the loan over five times and the fees paid reach 270 on a 300 loan — 90% of the principal — while the amount still owed is the original 300 plus the running fees. The APR stays at 391.1% throughout, because it was already the annualised cost of the loan and the rollover is simply that cost collected again. There is no scenario in which rolling over is cheaper than repaying.

300 at 15 per 100 for fourteen days, by number of rollovers

Rollovers	Total fees paid	Amount due at the end	Fees as a share of the principal
0	45	345	15
1	90	390	30
2	135	435	45
3	180	480	60
5	270	570	90

Every row is the same loan — 300 borrowed at 15 per 100 over fourteen days, so 45 per period — and only the number of rollovers changes. Each rollover adds one more 45 to the fees and leaves the principal untouched: at five rollovers the fees reach 270 and the amount due is 570, of which 300 is still the original loan. The last column is the one to read against the first: fees equal to 90% of what you borrowed, while what you borrowed is entirely unpaid. The APR is 391.1% in every row, which is why it is not a column — a rate that is already annualised does not move when you add more periods of itself. Amounts carry no currency symbol.

Formula

Finance charge = amount × feePer100 ÷ 100. Amount due at maturity = amount + finance charge. APR = (feePer100 ÷ 100) × (365 ÷ termDays) × 100. Total fees after r rollovers = finance charge × (r + 1).

amount: The amount borrowed, before any fee
feePer100: The lender's charge for every 100 borrowed, which is how these loans are quoted
termDays: The term in days — the period the fee buys
rollovers: How many times the loan is rolled over instead of repaid
periodsPerYear: How many terms of this length fit in a year: 365 ÷ termDays, which is the unit-period count the annualised rate is built from

Use it before signing, not after. The figure quoted across the counter is the fee per 100, and the fee per 100 is the only input most borrowers ever see — the APR is the same number annualised, and the annualising is what makes it comparable with any other form of credit you could use instead. Work out the cost of the payday loan first, then work out what the same amount would cost as a credit card balance or a personal loan over a month: the comparison is stark, and it is meant to be. Then use the rollover field to answer the question that actually decides whether this loan is survivable. If you already know you cannot repay on the next payday, the fees on the rollovers you will need are part of the price of the loan, not a separate misfortune — five rollovers on the default loan take the total fees to 90% of the principal, and the principal is still outstanding at the end of it.

Worked examples

300 borrowed at 15 per 100 for fourteen days
1. Finance charge: 300 × 15 ÷ 100 = 45
2. Due at the end of the term: 300 + 45 = 345
3. Fee as a share of the principal: 45 ÷ 300 = 15%
4. Periods of this length in a year: 365 ÷ 14 = 26.07
5. APR: 15% × 26.07 = 391.1%
The default case and the shape of the whole product: a 15% charge for a two-week period, annualised to 391.1%. Nothing here is compounded — the APR is a nominal annual rate, which is precisely how the regulation defines it. The point of annualising is not that you would pay 391.1% over a year; it is that 391.1% is the only figure that can be held up against a credit card or a personal loan at all.
The same loan rolled over five times
1. Each period costs the same 45, so six periods cost 6 × 45 = 270 in fees
2. Due at the end of the sixth period: 300 + 270 = 570
3. Fees as a share of the principal: 270 ÷ 300 = 90%
4. Periods of this length in a year is still 365 ÷ 14 = 26.07
5. The APR is unchanged at 391.1%, because it was already the annualised version of the same 15% per period
The case this page exists for. Five rollovers cost 270 in fees on a loan of 300, and at the end of it the 300 is still owed — the fee has been paid six times and the principal once. A two-week loan rolled over five times has been outstanding for twelve weeks, which is longer than the ninety days or so that most of the year would have taken to repay it. Note what did not move: the APR, 391.1% both times. A rate that is already annualised does not need to change when the term gets longer in units of itself.
300 borrowed for thirty days instead of fourteen
1. Finance charge: 300 × 15 ÷ 100 = 45, unchanged by the longer term
2. Due at the end of the term: 300 + 45 = 345
3. Periods of this length in a year: 365 ÷ 30 = 12.17
4. APR: 15% × 12.17 = 182.5%
5. Fee as a share of the principal: still 45 ÷ 300 = 15%
Same fee, same amount due, less than half the annualised rate — because the fee now buys twice as long, and the annualising spreads it over half as many periods a year. This is the clearest demonstration that the APR measures the price of the money rather than its size. It also flags a boundary in the regulation: a term of exactly one month would be counted as twelve periods in a year and give 180.0%, while thirty days is not a calendar month and is counted as 365 ÷ 30.

Limitations

This page models one fee and one fee only: a charge per 100 borrowed, applied once per period. Real payday loans carry more than that, and none of it is here — origination or application fees, late fees if the term is missed, returned-payment or nonsufficient-funds charges when a scheduled debit fails, collection costs, and any charge for the method of disbursement. Each of those raises the cost substantially above the figure on this page, and several of them are the ones that turn a single loan into a debt spiral. The APR shown is a nominal annual rate computed the way the regulation defines it, not a compounded effective rate: it is 15% times the number of periods in a year, with no compounding at all, which is why it is slightly lower than the compounded equivalent rather than higher. Nothing here models any legal limit on fees, terms or rollovers. Many jurisdictions cap the fee, restrict how often a loan may be rolled over, or require an instalment repayment plan after a set number of rollovers, and a loan that is legal where you are may be illegal, or cheaper than this page shows, somewhere else — this calculator describes the arithmetic of whatever numbers you type in, not what you are allowed to be charged. The term is capped at 365 days and the rollovers at 12. Amounts carry no currency symbol.

Frequently asked questions

What is the APR on a payday loan?: On the default here — 300 for fourteen days at 15 per 100 — it is 391.1%. The fee is 45, which is 15% of the principal, and fourteen days fits into a year 26.07 times, so the annualised rate is 15% × 26.07. It is a nominal annual rate with no compounding, which is how the regulation defines it, and it is the only figure that can be compared with a credit card or a personal loan.
Why does the APR not change when I roll the loan over?: Because it is already annualised. The APR measures the price of the money per period, multiplied out to a year, and a rollover is another period at the same price — so the rate is the same whether you roll once or five times. What changes is the money: five rollovers take the total fees from 45 to 270, and the amount you owe at the end from 345 to 570.
How much does rolling over actually cost?: One more fee each time. On 300 at 15 per 100, each rollover adds 45, so five rollovers cost 270 in fees in total — 90% of what you borrowed — and you still owe the original 300 at the end. Put next to the 45 you would have paid by simply repaying it on the first payday, the rollovers are the whole cost of the loan.
Is the APR the same thing as the interest rate?: No. The interest rate is what the lender charges per period — here 15% per fourteen days, which is the fee per 100. The APR is that rate converted into a yearly figure so that products with different periods can be compared. 15% per period is manageable-looking; 391.1% a year is the same fact told in a unit that makes the comparison honest.
Why does a thirty-day loan show a lower APR than a fourteen-day one?: The same 45 fee now buys twice as long, so the year contains 12.17 such periods instead of 26.07, and 15% × 12.17 is 182.5% rather than 391.1%. The cash cost did not change at all: the finance charge is still 45 and the amount due is still 345. Only the annualised rate moved, which is the point of annualising — it measures the price of the money, not its size.

References

Appendix J to Part 1026 — Annual Percentage Rate Computations for Closed-End Credit Transactions: the actuarial method, including the rule that a single advance with a single payment is annualised by dividing 365 by the number of days in the term — Electronic Code of Federal Regulations, Office of the Federal Register (United States)
12 CFR 1026.22 — Determination of annual percentage rate: the annual percentage rate is a defined computation, not a figure a lender may describe as it likes — Electronic Code of Federal Regulations, Office of the Federal Register (United States)

Related calculators

Credit Card Interest CalculatorInterest charged on a card balance over a billing cycle.Debt Consolidation CalculatorWhat consolidating debts saves in interest and months.Personal Loan CalculatorPersonal loan payment, interest and payoff schedule.Loan CalculatorRepayment amounts for any fixed-rate loan.