Welcome. We compare the best lenders in U.S. Our goal: You getting approved for a loan in a quick way.

Regulations By State
Do They Affect My Credit Report?
Frequently Asked Questions

Short term loan APRs: Real-life Comparisons

Like all lenders, short term loan lenders are required to disclose their fees with an APR to show potential borrowers how much the loan would cost if paid over an entire year. This leads to criticism that short term loans carry exorbitant interest rates. However, APR on a short term loan is not completely reliable because most short term loans have just a two-week lifespan. In fact, most people liken the the interest to a convenience fee. What if we gave other convenience fees an APR? The results might surprise you.

Setting the Standard
Let’s start off with a short term loan. Typically, lenders charge around $15 for every $100 borrowed. So say you take out a $100 short term loan for two weeks with a $15 charge. The $15 is considered interest on the loan, so when you calculate that rate as an APR, it comes to 391%. That sounds like a lot, doesn’t it? Let’s see how other types of fees we get charged in our everyday lives stack up against the short term loan.

Giving Everyday Fees an APR
Using the same calculation as above, we’ve determined the APR for fees we encounter every day, using the short term loan’s two-week repayment period and a consistent $100 loan for each transaction. Want to compare your own statistics?

Check out this APR calculator if you’d like to test out some of your own examples.

Overdraft fees
Americans pay over $30 billion in bank overdraft fees every year, with the average charge costing $30. Say you overdraw your account by $100 and then have to pay the $30 fee. Your APR on the transaction? 782%. Bounced checks average a fee of $30.42 and will carry the same APR.

Credit card late fees
Did you miss your last credit card payment? With the maximum late fee capped at $25, you’re looking at an APR of 652%.

Utility reconnect fees
If you’ve ever had your power turned off because of missed payments, then you know how hefty reconnect fees can be. To get reconnected outside of business hours, utility companies charge around $87. The APR? A whopping 2,268%.

Short term loans aren’t right for everyone, but they are extremely helpful when you’re in a crunch. Rather than worrying about an APR that isn’t relevant, compare lenders based on their fees for the actual repayment period, rather than a full year.

Grace Chen
Grace Chen - Writer & Editor
A graduate of the Haas School of Business, University of California, which is one of the top three (3) business schools in the U.S., Grace Chen has 10 years of experience in this field and have been delivering stellar business content through her written word. She’s the chief editor of Communicate Better and has written and edited thousands of content published in various online and printed media, including the NYSE-sponsored research studies and MEC Global. Connect with Grace on LinkedIn, https://www.linkedin.com/in/grace-chen-9254ab8/