The purpose of our payday loan calculator is to assist you in determining what loan size and repayment period are best for you. You can use the APR of the amount you want to borrow to ensure that it’s the correct answer for your financial concerns.
APR for Payday Loans and Advances
Why Do I Need a Payday Loans Calculator?
When taking out a payday loan online, the amount you repay will always be higher than the total amount borrowed. The installment payable factors-in interest and other charges, which is the total cost of borrowing. This amount varies depending on the loan term, and the interest levied on the borrowed sum. As you can imagine, coming up with precise figures isn’t exactly a walk in the park. This is especially the case if you’re not mathematically savvy.
That’s where a payday loans calculator comes in – to do all the heavy lifting for you so that you don’t have to. All you have to do is punch in the numbers – the loan amount, annual interest rate, and the loan term – and it will display the monthly repayments due, the total interest payable, and the overall amount you’ll have paid back by the end of the term.
|Best Rates||Accurate Estimates||Flexible Terms|
|Compare the total cost of payday loans from trusted lenders to ensure you’re getting the most competitive interest rates in the industry.||Get an accurate projection of the total debt you’re about to take on to avoid biting off more than you can chew.||Compare the lending terms from providers in your state and find out which ones offer flexible repayment terms in payday advances.|
Our payday loan calculator is designed to compute your monthly repayments based on the unique terms and interest rates you get from a particular lender. That way, you can compare what various payday lenders bring to the table to take advantage of the best possible terms. As a caveat, your monthly salary after-tax needs to be at least $1,500 to qualify for a payday cash advance.
How to Use the Payday Loans Calculator
Here’s how to use the tool:
- Visit the Capital Pacific Loans website and navigate to the Payday Loans Calculator tool.
- In the “loan amount field,” type in the size of the cash advance you want to borrow. If, for instance, you intend to take out a loan worth $1,000, that’s the value you need to enter in the loan-amount field of the payday loan rebate calculator.
- Next, type in the payday loan APR. The annual percentage rate (APR) refers to the rate of interest payable on the payday loan you take out. It will usually be a fixed rate set by the service provider. Payday loans APRs are generally higher than other forms of long-term financing, so keep that in mind when using this tool.
- Enter the loan repayment duration. The loan term is an important piece of the puzzle. Depending on the state you reside in, some jurisdictions only allow for single-payment payday advances with repayment durations of 7-31 days. Other states have payday loan installments with longer durations of 60-90 days. Consult your local statutes to find out the repayment duration you have to work with.
- Hit “Calculate” to compute the total value of the loan. When you do, the calculator tool will display the value of the repayment installment(s), the interest payable, the net amount you’ll have paid by the end of the term, and the applicable interest rate cap payday loans have in your state. Ensure you consult the existing payday lender loan legislation in your jurisdiction if there’s a provision for it.
- Select “Clear values” to delete the values you had previously entered and start over with the new rates. You can then input new values to compare the terms of a different payday loan provider.
How Payday Loans Are Calculated
Most payday lenders charge a fixed sum of money for every $100 they issue to a borrower. In most states, this amount ranges between $10 and $30 for every $100 borrowed. This translates to an interest rate of between 10% and 30%.
For instance, if you took out a loan worth $5,000 at an interest rate of 20% to repay within a month (30 days), computing the total interest would look something like this:
$5,000 x 0.2 = $1,000
This means that to borrow $5,000, you would need to pay back an additional $1,000 over and above the principal amount. At the end of the loan term, you’ll have paid back a total of $6,000. This is a very basic approach to how lenders work out the interest component of a loan.
How to Calculate the APR on Payday Loans
Payday loans are typically short-term, meaning the 20% we mentioned in our example above is not the APR. To calculate the annual percentage rate (APR) on the borrowed amount, you’ll need to:
- Divide the total interest paid by the principal
- Multiply that number by 365 (the total number of days in a year)
- Divide the answer you get by the repayment duration (in days)
- Multiply that number by 100
For instance, the payday loan APR calculation on the $5,000 loan in our earlier example would look something like this:
$1,000 ÷ $5,000 = 0.2 x 365 = 73 ÷ 30 = 2.43 x 100 = 243%
The APR, in this case, would be 243%.
Now, while that figure might seem astronomically high, you need to keep in mind that payday loans are not designed to be long-term. Their repayment duration typically ranges between two weeks to three months on average, depending on the state you reside in. If you need more time on the loan or a lower interest rate, it might be a good idea to consider a different alternative entirely.
What Are Payday Loans?
A payday loan is a short-term form of credit that a lender issues to a borrower based on the latter’s personal check. A borrower makes out a check to the lender in the sum borrowed as well as the interest charged and any other fees associated with the loan before they can receive the cash. Some payday lenders require the borrower to sign over electronic access to their bank account in place of the check to receive and repay the borrowed loan.
Once the lender receives the check, they hold onto it until the borrower’s next payday, when the loan and financing costs are paid in a single lump sum. There are three ways in which you can repay a payday loan.
On the one hand, you could pay it with cash to redeem your check. There’s also the option to pay the interest and associated fees. This allows the loan to roll over until the next pay period. Finally, you could just sit back and allow the lender to deposit the check at their bank to recover the amount you borrowed.
The term “payday” in payday loans means that they are designed to be short-term. This could be anywhere between two weeks to a month, depending on the frequency with which you receive your wages and the lending laws in your state. They are supposed to bridge the financial gap created by an emergency that requires urgent cash, particularly when waiting until your next payday isn’t an option.
That said, some lenders offer longer terms, allowing borrowers to pay off the loan in multiple installments. In such cases, the borrower would need to authorize the lender to make electronic withdrawals from their bank account over an agreed-upon period until the entire sum is repaid. In most cases, the monthly repayment would be due on the borrower’s next payday.
How Much Can You Borrow From a Payday Loan?
The maximum sum you can borrow ultimately comes down to the size of your regular paycheck and your state’s laws. If, for instance, you have a bi-weekly $1,000 wage, your payday loan online limit will usually be around that much if you intend to repay it by the time your next paycheck is due. If you borrow from a lender with more flexible repayment terms, allowing you to make multiple installments over a longer duration, then there would be more wiggle room when it comes to the loan limit.
As far as state laws go, payday credit lending is legal in 32 states across the country. Only 15 states and the District of Columbia have passed specific legislation that sets certain prohibitions on the maximum interest rates chargeable and the amount in funding that borrowers can access.
One common misconception among individuals looking to take out a loan is – cheaper is better. That, when comparing different lenders based on the amounts a borrower would be required to repay, you should always go with the one charging the lowest overall interest. Here’s why an approach that centers solely on payday loan affordability might end up doing more harm than good to your financial health.
Lenders with lower interest rates might have a ton of hidden fees, which inevitably drive up the cost of the loan. By the time your debt is settled in full, you might find that the additional amount you’ll have repaid exceeds your initial expectations. Additionally, basing your decision to go with a particular lender solely on the basis of a lower interest could also mean a shorter repayment term, which translates to higher monthly repayments.
The rule of thumb when taking out a loan of any kind is to look at the fine print. Our online payday loan calculator takes all this into account. What you see is what you get, so you don’t have to worry about incurring hidden costs or punitive repayment terms once you take out the loan.
How Do Payday Loans Work?
To understand how the calculator works, you first need to get a handle on how payday loans, in general, function. In addition to repaying the principal amount you borrow, you will also be on the hook for interest and any fees associated with the payday loan. These constitute the so-called “cost” of the loan. There are three main payday loan considerations to keep in mind:
- Principal – This is the total sum of money you borrow. It is the amount that the lender wires into your bank account. If you want to borrow $1,000, and the creditor approves, this is the amount that will be deposited into your account.
- Interest – This is the sum the lender charges you to access credit. It is calculated as an annual percentage rate or, APR for short, on the principal. Payday loans usually have a fixed interest rate, meaning your monthly repayments won’t change over the lifetime of the loan.
- Fees – These are the additional charges over and above the payday loan calculated and are associated with the credit funding. They determine the payday loan affordability. They might include application fees, insufficient funds fees, late payment fees, prepayment penalties, returned check fees, payment protection, insurance, and so forth.
It’s important to note that the interest rate might also include the amount of money a lender might charge you upfront. These charges are referred to as origination fees and could add a couple of hundred dollars to your loan costs. This amount goes toward application processing, verifying new applicants, and offsetting the underwriting costs. Origination fees can be as low as 1% of the loan amount or as high as 9%. It all comes down to the duration of the loan.
It is also worth mentioning that your monthly repayment is not only based on the principal you borrow but also on the term of the loan. If you have six months to pay back a $1,000 payday loan, your monthly installment will be higher than if the same amount was spread over, say, 12 months.
What Are Payday Loans Alternatives?
If you’re cash strapped and in need of immediate cash before your next paycheck, getting a payday loan is basically a no-brainer. It gives you the cash you need almost instantly and skips all the lengthy paperwork and approval processes that are synonymous with traditional forms of lending. You don’t even need a sterling credit history to access funding. As long as you’re employed and receive a regular paycheck, you will generally be a good candidate for a payday loan.
That said, there are a couple of drawbacks that come with this form of funding. For starters, payday loans are extremely short-term. Their loan duration typically ranges between two weeks and three months on average, depending on the lender. As a result, it becomes quite easy to fall behind on your repayments, especially if you make it a habit. The higher-than-average interest rate associated with payday loans is something else you need to be wary of. If you fall behind on your installments, these loans are notorious for derailing borrowers’ credit scores and financial health in general.
Before resorting to this form of credit financing, here are a couple of options to consider when looking for debt relief.
- Apply for a cash advance: Since you’re going to use your paycheck to secure a payday loan anyway, why not apply for a cash advance on it instead? Most employers have policies that allow their employees to get a portion of their paycheck before it is due. That way, by the time the next payday rolls around, the amount you borrowed in your cash advance will be deducted from your paycheck.
- Borrow from friends and family: If you cringe at the thought of having to borrow money from others, you’re in good company. On the flip side, it might be a better option to explore before resorting to taking out a payday loan.
- Seek financial aid from your local charity: If you’ve run into financial trouble, you would be surprised by the number of religious and charity organizations that would be willing to provide you with monetary assistance at no cost whatsoever.
- Sell your personal belongings: Garage sale, anyone? Look around your home. Find things that you no longer need or use, and sell them to meet the cash deficit you’re currently facing. If garage sales aren’t your jam, you can put them up on Craigslist or eBay and wait for a willing buyer to contact you.
- Apply for a secured personal loan: Finally, consider applying for a secured loan. If you have a car, for instance, you can use it as collateral to get a title loan. These tend to offer more flexible terms, higher loan limits, and longer repayment durations, for lower more-manageable installments.
What Happens If I Can’t Repay My Payday Loan?
Should you fail to repay the loan within the agreed-upon duration or miss an installment, the amount due rolls over to the next repayment period. This also means incurring late payment fees and additional interest, which keeps compounding every time you miss a payment.
To avoid falling into a never-ending cycle of bad debt that could ruin your chances of securing credit funding in the future, ensure you use a payday loan calculator to figure out whether or not you can afford to settle the debt you take on. That way, you minimize your chances of defaulting.