Understanding Loan Costs

Dollar fee and APR answer different questions

A dollar fee tells you the charge for a particular borrowing amount and term. APR expresses the annualized cost of credit, including applicable finance charges, as a percentage. A short loan can have a fee that looks modest in dollars while producing a high APR because the same cost is measured over only a few days or weeks.

Look at both numbers. The fee and total due show the cash you need at the deadline. APR helps compare costs across products with different terms. It does not tell you whether the payment fits your budget, and it should not replace reading the amount due and schedule in the actual loan documents. The Consumer Financial Protection Bureau explains that APR allows comparisons and illustrates how a two-week term annualizes a fee.

Hypothetical example: $100 for 14 days

Suppose a hypothetical lender charges a single $15 fee on $100 principal, due in 14 days. The dollar fee for the 14-day period is $15. The total repayment at that due date is $115, assuming no other charges and no extension.

A simple annualized calculation for this illustration is:

($15 ÷ $100) × (365 ÷ 14) × 100 = 391.07% APR

The $15 is the fee for this example’s 14-day loan. The 391.07% is the calculated annualized percentage, not an extra amount added to the stated $115 repayment. This arithmetic uses the simple annualization method shown by the CFPB. Actual APR disclosures may depend on the loan’s terms and applicable disclosure rules, so compare the APR shown in the provider’s documents.

The example is deliberately not attached to a Cash & Go product: these pages do not publish a current offer. It does not establish what any lender may charge in any state or whether a particular product is lawful or available.

Include every part of the cost

Before accepting an offer, check the provider’s written disclosures for the principal, finance charge, APR, total of payments, number and timing of payments, and any origination, late, returned-payment, card, or other fees that apply. Find out whether a fee is charged once or each time a due date changes. For installment credit, add all scheduled payments and fees rather than focusing on the first payment alone.

Ask whether early repayment changes the amount owed, how a missed payment is treated, and whether automatic debits are authorized. Keep the answers and agreement. If a cost is not clear, ask the provider to show the total in dollars and explain how it was calculated before you submit or accept anything.

Why repeated extensions matter

A rollover or renewal generally means paying a fee to delay the due date. The fee does not reduce the original principal, so another fee may be charged while the original balance remains owed. The CFPB gives an example where a borrower pays a fee to extend the loan and still owes the principal plus a new fee at the next due date. Availability and restrictions vary; do not assume a rollover is offered or allowed for a particular loan.

If repayment looks difficult, contact the actual lender before the due date and ask about an extended payment plan or other options. Such plans may depend on state law or lender policy and may have conditions or fees. Read the responsible borrowing checklist before committing.

Compare alternatives on the same basis

When comparing a credit card, installment loan, credit union product, or payment plan, compare APR where it is disclosed, total dollars paid, fees, payment timing, and consequences of missing a payment. A lower APR does not automatically mean an affordable payment; a longer term can affect the total paid. Review possible alternatives and consider whether a bill arrangement avoids borrowing altogether.

For background, consult the CFPB’s payday loan cost and fee explanation and APR guide. See the FAQ, How it works, Privacy Policy, and Terms for site and application information.