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Simple tips to Calculate APR for Payday Advances

Simple tips to Calculate APR for Payday Advances

Whenever determining the APR for a loan that is payday you will need three bits of information.

  1. The loan that is principal, or how much cash you might be borrowing
  2. The amount you’re spending in interest in the loan, generally known as the “finance charge.”
  3. The length of the payment term, or just how long the loan will be outstanding.

A bit easier to understand, let’s use an example to make things

Cash advance # 1 has…

  1. A loan that is principal of $400
  2. A pastime amount/finance fee of $80 (an interest rate of $20 per $100 lent)
  3. A payment term of fourteen days.

First, you’ll want to divide the interest/finance fee because of the loan principal:

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