1. What is the Payday Loan Calculator?

The Payday Loan Calculator estimates the total amount you'll need to repay for a UK payday loan, including principal and interest. It helps borrowers understand the true cost of short-term, high-interest loans.

2. How Does the Calculator Work?

The calculator uses the payday loan formula:

Where:

• \( PV \) — Principal amount borrowed (GBP)
• \( r \) — Monthly interest rate (%)
• \( Days \) — Loan duration in days

Explanation: The formula calculates the total repayment by adding the principal to the interest accrued over the loan period, prorated for the exact number of days.

3. Understanding Payday Loan Costs

Details: Payday loans in the UK typically have high interest rates (often 0.8% per day or more). This calculator helps visualize how quickly costs can accumulate, even over short periods.

4. Using the Calculator

Tips: Enter the loan amount in GBP, the monthly interest rate as a percentage (e.g., 25 for 25%), and the loan duration in days. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical interest rate for UK payday loans?
A: Rates vary but often range from 0.7% to 1.5% per day, equivalent to about 25-50% per month.

Q2: Are there additional fees not included in this calculation?
A: Some lenders may charge additional fees (late payment, administration, etc.) that aren't reflected in this basic calculation.

Q3: How accurate is this calculator?
A: It provides a good estimate for standard payday loans, but actual terms may vary by lender. Always check your loan agreement.

Q4: What are alternatives to payday loans?
A: Consider credit union loans, payment plans with creditors, or government assistance programs before opting for high-interest payday loans.

Q5: Is there a legal limit on payday loan interest in the UK?
A: Yes, the FCA caps payday loan costs at 0.8% per day in interest and fees, with total repayment capped at twice the borrowed amount.