Why is the APR so high for 10 days?
APR assumes the rate applies for a full year. A $15 fee over 10 days works out to $547.50 annually on $500 if renewed every 10 days. That's why short-term loans show extreme APRs.
Debt Management
Paycheck Advance Break-Even Calculator
Calculate the short-term effective APR of your advance and compare it to an alternative interest rate.
Figure Out If It's Worth It
Pinpoint the cost of bridging the gap until your next paycheck.
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What this calculator does
A paycheck advance is a short-term loan against your next paycheck, available through employers, apps, or payday lenders. The effective APR can be shockingly high—a $15 fee on $500 for 10 days equals 1000%+ APR. This calculator reveals whether advances or alternatives are more cost-effective.
How it works
The calculator computes effective APR by treating the fee as daily interest over the borrowing period, then annualizing it. It compares your advance's APR to alternatives like credit cards or personal loans to determine which costs less.
Formula
Daily Rate = Fee ÷ Amount. Effective APR = Daily Rate × (365 ÷ Days Until Payday) × 100. Cost per $100 = (Fee ÷ Amount) × 100. Daily Cost = Fee ÷ Days Until Payday.
Tips for using this calculator
- Check if your employer offers free or low-cost advances first
- Avoid rolling over advances—each rollover multiplies fees
- Use advances only for true emergencies
- Compare to alternatives with similar timelines
- Calculate the real APR before accepting
Frequently asked questions
Is a paycheck advance better than a payday loan?
Employer advances are often free or low-cost—better than payday loans. Fintech app advances ($10-15 per $100) are slightly cheaper than typical payday loans ($15-20 per $100).
What if I can't repay by payday?
With employer advances, the amount is usually deducted automatically. With third-party services, failure triggers rollover fees, spiraling into debt. Ensure you'll have enough to repay.