💵 Loans & AdvancesUpdated: September 2, 2026
Payday Loan APR Explained: Fee Structures & 14-Day Effective Rates
Reviewed by Consumer Financial Protection & Small-Dollar Lending Review Board
Key Financial Takeaways
Understanding short-term loan math: calculating annualized percentage rates (APR) from a $15 per $100 fee, 14-day compounding, and Truth in Lending Act metrics.
Payday loan costs are commonly quoted as a flat fee per $100 borrowed, but the Truth in Lending Act requires calculating the Annual Percentage Rate (APR) to allow standardized financial comparisons.
1. Mathematical APR Calculation Breakdown
The Standard APR Formula
$$\text{APR} = \left( \frac{\text{Finance Charge}}{\text{Principal Amount}} \right) \times \left( \frac{365}{\text{Loan Term in Days}} \right) \times 100$$
| Loan Amount | Finance Fee ($15/$100) | Term in Days | Total Repayment | Calculated APR |
|---|
| $100.00 | $15.00 | 14 Days | $115.00 | 391.07% |
| $300.00 | $45.00 | 14 Days | $345.00 | 391.07% |
| $500.00 | $75.00 | 14 Days | $575.00 | 391.07% |
| $1,000.00 | $150.00 | 14 Days | $1,150.00 | 391.07% |
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Consumer Financial Protection & Small-Dollar Lending Review Board
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