How Much Do Payday Loans Cost?

how much do payday loans payday lenders cost imagePayday loans get a bad press because of the way they, BY LAW, have to display their charges and interest rates for borrowing money. But how much do payday loans cost?

ANY loan is calculated by how much money you would repay if you had that loan for a whole year.

So if you borrow £100 or $100 for 1 year at 15% you would repay £9.03 per month, and after 12 months you would have repaid a total of £108.31.

Therefore, the cost of borrowing is £8.31. If you live in the USA or another country, just replace the £ with $ or another currency.

We found a really handy interest calculator that you can use to work out the total cost of what a loan will cost you.

You just input the amount you want to borrow, the time you want to borrow it for, and the interest rate, and  it works it out for you.


Click Here To See The Loan Cost Calculator


Most normal payday loans will charge you approx £30 or $30 for borrowing £100 or $100 for 1 month.

Assuming that is the only charge each month, £30, or $30, then if you borrowed that £100 or $100 for a whole year, then over the 12 months you would repay a total of :

12 x £30 = £360 INTEREST + the original £100 that you borrowed, so the total you would have to repay is £460.

Clearly, not a cheap way of borrowing money.

There are other pages on this website where we show the EXACT cost that each lender charges. Some lenders do a super fast bank transfer and you have your loan in your bank within a few hours.

The cost for this is additional to the interest on the loan, and is generally anything from free – £12. We will link this post to the true charges and costs page when we have built it.


The longer you want to borrow money for, the more lenders check your credit rating. The worse your credit rating, the fewer options you will have when you need to borrow money.

So one really good thing about payday loans is that they can offer you credit when no-one else can. It might be at a high interest rate, but, if you REALLY need money, and have no other cheaper options, then they could be a great solution for you, IF, and ONLY IF, you can afford to repay them when you say you will.

Lots of payday loans companies do not do a full credit check at all. They might do a basic one, just to satisfy themselves that you are able to repay when you promise to, and they also make sure that you HAVE a job and receive a regular income before lending to you.

The final thing to mention about payday loans is to just look at the total COST of it to you.

What do you have to repay, and can you afford it? If you REALLY need money between paydays, what will happen if you do NOT borrow the money?

Using the examples above, if your car breaks down and you don’t get it repaired, you might need to hire a car for work which would cost more. Or you might need to pay for laundry which would cost more.

More importantly though, if you go over your credit card limit, or your overdraft limit at your bank, most banks will charge you for this unauthorised borrowing.


I am sure it’s happened to most people reading this, it certainly has to us! You go over your overdraft limit by accident, even by the cost of a cup of coffee sometimes, and they slap you with £30, $30 charges.

Sometimes you don’t even realise you have done this and you make a few purchases and they charge you EVERY time.

Not cool. And VERY expensive.

This is where you can make a direct cost comparison for payday loans lenders, and your bank charges. Payday loans are designed to be a cheaper alternative to these big bank charges for unauthorised borrowing.

In most cases, payday loans ARE cheaper than unauthorised bank borrowing charges, but it is important to note that BOTH types of borrowing are not ideal.

However, if you get a payday loan, and pay it back on time, it CAN be a good start to taking control of your money and re building your credit history, so in the future you can get cheaper loans, and hopefully one day, no loans at all.

Warning Late repayment can cause you serious money problems. For help, go to