How much would a $200 payday loan cost?

Quick Answer The cost of a $200 payday loan can vary depending on the lender and the specific terms of the loan. As an example, a typical $200 payday loan with a 450% APR would cost you $34.52 in finance charges after two weeks (excluding fees), resulting in a total of $234.52 owed to your lender.

Tobi Opeyemi Amure profile picture
Tobi Opeyemi Amure Answer updated on Aug 1, 2023

Fact checked by Dwayne Dumesle

What's the cost of a $200 payday loan, you ask? Well, it varies depending on your lender and loan terms. Let's look at some examples, so we can visualize the answer. 🧮

OK, let's assume you get a $200 payday loan with a 450% Annual Percentage Rate (APR), which is not uncommon for a payday loan.

Now, how much would it cost you? Well, if you repay it after the typical two-week period, your finance charges would come to about $34.52. So, at the end of your loan term, you would owe the lender a grand total of $234.52, excluding any potential additional fees. 💸🙁

Learn: How much would a $500 payday loan cost?

Here's a detailed breakdown behind these terms, if you are unfamiliar:

  • Principal Loan Amount: $200 - This is the initial amount that you borrowed.
  • Annual Interest Rate (APR): 450% 👀 - This is the annual cost of your loan, including fees and interest.
  • Loan Period: 2 weeks - This is the typical term for a payday loan.

Of course, this simple example does not factor in the many fees (like origination, late payment, or rollover fees) payday lenders often charge. These extra fees can inflate the cost of your loan significantly.

Also, remember that the APR on payday loans is calculated annually — so, if you extend the term of your loan, you're in for a bigger hit.

To avoid these high costs, consider alternatives to payday loans if possible. They could be things like personal loans for bad credit, credit card cash advances, payday alternative loan, or borrowing from friends and family. These alternatives could save you from falling into a cycle of debt.

Learn: What is a payday alternative loan?

Be savvy when it comes to your finances. Understand the costs associated with payday loans and make an informed decision. Because, at the end of the day, your financial health matters! 💖💵

profile avatar

My experience with Sound Financial has been absolutely incredible. I got the quick cash I needed without any hassles. The entire process was simple and transparent.