Payday Loan Cost Calculator
Work out the true cost of a short-term small amount credit contract, including establishment and monthly fees, expressed as a dollar and percentage cost.
Your results
Small amount credit contract fees are set as percentages, not an annual interest rate, which is why annualising them produces a very high percentage.
Calculation breakdown
- Establishment fee
- amount × establishment %
- Monthly fees
- amount × monthly % × number of months
- Annualised cost
- (total fees ÷ amount) × (12 ÷ months) × 100
Worked example
Borrowing $1,000 over 6 months with a 20% establishment fee and a 4% monthly fee costs $200 upfront plus $240 in monthly fees, a total of $440 in fees, or roughly $1,440 repayable.
Assumptions
- Fee percentages vary by provider and are capped under Australian consumer credit law; enter your provider's actual quoted fees.
- Assumes fees are charged on the original amount borrowed each month, not a reducing balance.
- Does not include any default or dishonour fees.
Sources
How this calculator works
Small amount credit contracts in Australia are typically charged as a percentage establishment fee plus a monthly account-keeping fee rather than an annual interest rate. This calculator totals those fees over the loan term to show the real dollar cost and the equivalent annualised percentage, so you can compare it with other borrowing options.
Frequently asked questions
Are payday loan fees capped in Australia?
Small amount credit contracts are subject to regulatory fee caps set by ASIC and the National Consumer Credit Protection Act; enter the actual fees quoted by the provider since caps can change.
Why is the annualised cost so high compared to a personal loan?
Because the fees are charged on a very short term, spreading a similar dollar fee over a full year makes the annualised percentage look much higher than a standard personal loan rate.
What are cheaper alternatives to a payday loan?
Options can include a low or no-interest loan scheme, hardship arrangements with billers, or a mainstream personal loan; compare the total cost here before committing to short-term credit.
Results are estimates only and are not financial, tax, legal or credit advice.