💡 Pro tip: Before borrowing, run the numbers — most payday loans cost 4x more if rolled over. See your true cost →
PDLoans247
Free Loan Calculators & State-by-State Guides
PDLoans247
Free Loan Calculators & State-by-State Guides
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| Parameter | Value |
|---|---|
| Principal | $500.00 |
| Term | 12 months |
| Stated APR | 36.00% |
| Origination fee (5%) | $25.00 |
| Monthly payment | $50.83 |
| Total payments | $609.96 |
| Total cost of credit | $109.96 |
| Effective APR (incl. fee) | 43.4% |
A $500 installment loan over 12 months at 36% APR results in approximately $51 per month and a total repayment of $609.96. The origination fee of $25 increases the effective APR from 36% to 43.4% — a figure many borrowers overlook when comparing offers.
For context, a single-payment payday loan for $500 in a state with a $15-per-$100 fee structure costs $75 over 14 days, equating to an effective APR of 391%. If that loan is rolled over three times — the statistical average for payday borrowers — the total cost reaches $300, or 60% of the original principal, with no reduction in the balance.
The installment structure in this example reduces the effective APR by roughly 88% compared to the rolled payday scenario, and the borrower builds equity in the loan with each payment rather than paying fees alone.
If the monthly payment of $51 exceeds 5% of your monthly take-home pay, consider whether the loan is sustainable. A common benchmark from consumer finance counselors: total debt payments should not exceed 36% of gross income. If this loan would push you above that threshold, contact a nonprofit credit counselor before proceeding.
This calculation uses a standard amortization formula. Actual terms vary by lender, state, and credit profile. The 36% APR figure reflects a common regulatory cap but is not guaranteed. Always review the lender's Truth in Lending disclosure for the exact APR, finance charge, and payment schedule before signing.