Payday loans – Costs and Fees involved in a Payday loans

What are the costs and fees involved in a payday loan?

Payday loans generally charge a percentage or amount of money for every $100 borrowed. The cost of that fee could range from $10 to $30 for every $100 borrowed, depending on your state law and the maximum amount your state allows you to borrow.

A charge of $15 per $100 is common. This equates to an effective annual rate of almost 400% for a two-week loan. So, for example, if you have to borrow $300 before your next payday, it will cost you $345 to repay the loan, assuming there is a $15 fee for every $100.


If you are unable to pay your loan when due and state law allows refinancing, payday lenders may allow you to pay only the fees due and the lender extends the due date of your loan. You will receive an additional charge and you will still owe the entire original balance. Using the example above, if you pay a $45 renewal or refinancing fee, you still owe the original $300 loan and another $45 in fees when the extension is complete. This is a charge of $90 for a loan of $300 for only four weeks.

Payment plans

Some state laws require lenders to offer extended payment plans to borrowers who have difficulty repaying payday loans. These laws vary from state to state and may or may not allow or require a fee for use of the payment plan.

If your state requires a lender to offer you an extended payment plan, you may be able to get extra time to pay off your loan at no additional cost or fee. This means you can pay off your loan instead of borrowing again, incurring more fees, and falling further behind on your debt.

Interest for late payments

Also, if you don’t pay the loan on time, the lender may charge a late payment or bounced check fee, depending on state law. Your bank or credit union may also charge an NSF fee if your check or electronic authorization does not clear due to insufficient funds in your account.

Prepaid debit card

If your loan funds are loaded onto one of those cards, there may be other fees. There may be fees to add money to the Card, fees to check your balance or call customer service, fees each time you use the Card, and/or regular monthly fees.

Leave a Comment