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What is the interest rate (APR) on payday loans?
It varies.
Let's start with a definition of APR From Wikipedia:
Annual Percentage Rate (APR) is an expression of the effective interest rate that will be paid on a loan, taking into account one-time fees and standardizing the way the rate is expressed. The aim of using APR is to calculate a total cost of borrowing. APR is intended to make it easier to compare lenders and loan options.
Because APR is calculated on a case-by-case basis, it is impossible to directly answer this question. All payday lenders have different contract terms so the payday loan length and dollar amount can vary widely. (To further complicate the issue, the outcomes of APR calculations can vary based on the exact equasion used in the calculation.)
It is agreed, however, that payday loan APRs are very, very high when compared to other APRs.
Below, we've included a table to show sample APRs and fees on different loan amounts.
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APR rate sample for a hypothetical payday loan
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| |
|
Loan amount |
Loan
Term
(Days) |
Annual
Percentage
Rate (APR) |
$100 |
$150 |
$200 |
$250 |
$300 |
$350 |
$400 |
|
| |
|
Total fees owed per payday, assuming $30 fee per $100 loaned |
| 4 |
2737.50% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 5 |
2190.00% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 6 |
1825.01% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 7 |
1564.29% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 8 |
1368.76% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 9 |
1216.67% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 10 |
1095.00% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 11 |
995.46% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 12 |
912.51% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 13 |
842.31% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 14 |
782.15% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 15 |
730.01% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 16 |
684.38% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 17 |
644.12% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 18 |
608.34% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 19 |
576.32% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 20 |
547.51% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 21 |
521.43% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 22 |
497.73% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 23 |
476.09% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 24 |
456.26% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 25 |
438.01% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 26 |
421.16% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 27 |
405.56% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
| 28 |
391.08% |
$30 |
$45 |
$60 |
$75 |
$90 |
$105 |
$120 |
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Next Tip
What is a payday loan? How is it different from other credit?
Related Tips
How do payday loan companies make money? | How much more expensive is a payday loan than other credit? | What is the best kind of payday loan?
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