How Payday Loans Work
A payday loan is a small, short-term loan designed to be repaid in full on your next payday — typically within 2 to 4 weeks. Approval is usually fast since the amounts are small and the term is short, making it one of the quickest ways to access cash for an unexpected expense.
⚠️ Payday loans carry higher effective costs than installment loans of similar size. Only borrow what you're certain you can repay in full on the due date — repeated rollovers can compound costs quickly.
Payday APR vs. Our Standard Loan Range
The "APRs typically 5.99%–35.99%" figure quoted elsewhere on this site describes our standard installment and personal loan network — it does not apply to payday loans. Because payday loans charge a flat fee on a very short term, the equivalent APR is far higher: industry-wide, the average payday loan APR runs around 391% (see our loan statistics research). A $15 fee on a $100 two-week loan works out to roughly 391% APR by itself. Always calculate the dollar cost, not just the fee, before accepting a payday offer.
When a Payday Loan Makes Sense
- You need a small amount ($100–$500) and can repay it in full within 2–4 weeks
- You've compared the total repayment cost against an installment loan and the payday option is genuinely faster for your situation
- You don't already have an outstanding payday loan you're still repaying
Frequently Asked Questions
How much can I borrow with a payday loan?
Payday loans in our network typically range from $100 to $1,500, repaid in full on your next payday.
Are payday loans expensive?
Yes, relative to their size — the flat fee structure often works out to a high effective APR. Always review the full cost before accepting, and consider an installment loan if you need more time to repay.
Ready to see your options? Compare payday offers from our full lender network in under 2 minutes.
Example: a $1,500 loan at a 20.99% APR over a 24-month term would carry an estimated monthly payment of $77.07. Actual payments vary by lender and depend on your approved rate and term.