For short-term borrowing, compare the dollar charge, the total amount due and the length of time you use the money. A fee by itself leaves out part of the decision. CFPB notes that payday costs and permitted charges vary with state rules and the transaction. 1
The examples here are arithmetic illustrations. They do not establish a provider’s fee, approval amount or legally available product.
Calculate the full cost · Plan repayment
Begin with cash actually received
For a single-payment illustration:
Total due = cash received + finance charge.
Simple annualized cost = charge ÷ cash received × 365 ÷ days × 100.
This simplified model assumes one advance and one repayment with the stated charge. It is not a replacement for the actual lender’s legally required APR disclosure or a general legal classification of all charges.
What a fee per $100 means in dollars
A hypothetical charge of $15 per $100 received produces a $45 charge for $300 and a total repayment of $345. At 14 days, the simple annualized figure is approximately 391.07%. 1
| Illustrative cash received | Charge | Period | Total due | Simple annualized cost |
|---|---|---|---|---|
| $300 | $30 | 14 days | $330 | 260.71% |
| $300 | $45 | 14 days | $345 | 391.07% |
| $300 | $45 | 28 days | $345 | 195.54% |
The third row uses the same dollar charge for twice the period. It does not claim that extending a real loan is free. An actual extension can have additional charges or may not be permitted.
California uses a different starting amount
Under the California deferred-deposit provisions cited here, the check’s face amount may not exceed $300 and the fee may not exceed 15% of that face amount. At the maximum fee, the cash received is $255 and the amount of the check is $300. 2 3
$300 check − $45 fee = $255 cash received.
If that illustration runs for 14 days, $45 ÷ $255 × 365 ÷ 14 × 100 ≈ 460.08%. Using $300 as the cash denominator would describe a different transaction and understate this example’s simple annualized cost.
The statutory term maximum is 31 days. These legal facts are separate from any provider’s availability or license. 2
APR and dollar cost answer different questions
The dollar charge tells you the immediate cost in money. An annualized measure expresses cost relative to the period and amount. Neither number, by itself, shows whether the entire repayment fits your due-date budget.
Compare transactions using equivalent cash amounts and their actual dates. Do not use an annualized figure to imply that you will necessarily keep the loan for a full year. Equally, a short term does not make a high charge irrelevant.
A renewal payment may not reduce principal
In a hypothetical jurisdiction and product where renewal is permitted, paying another fee can postpone the repayment while leaving the principal outstanding. Record fees paid to date, new charges, principal remaining and the next total due separately. Do not count a fee payment as principal reduction without evidence. 1
California’s cited deferred-deposit framework restricts using a new transaction to pay an existing one, and extensions or payment plans cannot add an extra charge under the specified provisions. Do not assume a rollover option advertised elsewhere is permitted or available for a California deferred-deposit transaction. 2 3
Other charges require their own conditions
An agreement may describe returned-payment or other contingent charges where allowed. Those are not automatically part of the original fee, and not every product permits the same charge. Read the condition, amount and who imposes it. A bank charge and a lender charge are not necessarily the same item. 1
For the budget comparison, keep a base scheduled-repayment scenario separate from a missed-payment scenario. Do not imply the second will occur, or ignore it if the user is specifically asking about that risk.
Use the result before continuing
Put the total due next to money available after essential expenses on the actual date. If the comparison shows a shortfall, investigate a different payment arrangement or another way to cover the original bill. 4
The amount needed on the repayment date is more useful than a vague “affordable” badge. The tool does not assess legal ability to repay or replace lender underwriting.
Payday-cost questions
Is the illustrated fee your price? No. It is a labeled calculation. Actual terms require a named provider and applicable disclosures.
Why do $300 examples show different annualized figures? One can mean $300 cash received and another a $300 check with a fee deducted. The denominator must match the transaction.
Does doubling the term always halve the cost? Not the dollar cost, and a real extension may introduce charges or be unavailable. The table only changes the stated period while holding the fee fixed.
Can I use this to calculate a legal APR for every product? No. Use the actual required disclosure; this is a simplified single-payment model.
Where do I go if repayment will be difficult? Use repayment guidance and the actual creditor’s support, not another automatic application.
Check what happens after this calculation
A fee estimate answers the price question. Your next check is whether the full payment and essential bills can both be covered by the due date.
Test the repayment date