Whenever determining the APR for a loan that is payday you will need three bits of information.
- The loan that is principal, or how much cash you might be borrowing
- The amount youвЂ™re spending in interest in the loan, generally known as the вЂњfinance charge.вЂќ
- The length of the payment term, or just how long the loan will be outstanding.
A bit easier to understand, letвЂ™s use an example to make things
Cash advance # 1 hasвЂ¦
- A loan that is principal of $400
- A pastime amount/finance fee of $80 (an interest rate of $20 per $100 lent)
- A payment term of fourteen days.
First, youвЂ™ll want to divide the interest/finance fee because of the loan principal: