What $15 per $100 works out to
A $500 payday loan at $15 per $100 costs $75 for two weeks. Put the same $500 on a credit card at 25 percent APR and two weeks of interest runs about $4.79. Same money, same fortnight, roughly fifteen times the price. The fee is quoted per $100 partly because $15 sounds harmless in a way that 391 percent does not.
The range across the market is wide but never cheap. Fees from $10 to $30 per $100 on terms of one to four weeks produce annual rates from the low 200s to nearly 800 percent. Nothing else with mainstream distribution charges rates in that neighborhood, which is why payday pricing sits at the center of most state small-loan fights.
Four small-dollar loans side by side
When cash runs short, four products compete for the same borrower: a payday loan against the next paycheck, a pawn loan against an item left at the shop, a title loan against a vehicle, and a Payday Alternative Loan from a credit union. Price separates them, but so does what happens on a miss. A pawn default costs you the item and nothing more. A payday default reaches into your bank account; a title default can take your car. The table lines them up.
| Option | Typical cost | What secures it | If you cannot repay |
|---|---|---|---|
| Payday loan | $15 per $100 for 2 weeks (about 391% APR) | Access to your bank account or a post-dated check | Repeated withdrawal attempts, overdraft fees, then collections |
| Pawn loan | Monthly fees set by state law, often comparable to title loans | An item you leave with the pawnbroker | You forfeit the item; no collections, no credit damage |
| Title loan | 25% per month (about 300% APR) | Your vehicle title | Repossession, possibly with a deficiency balance still owed |
| Credit union PAL | Capped at 28% APR plus a small application fee | Credit union membership, no collateral | Standard collections, but the low rate keeps balances manageable |
Short-term small-dollar options, roughly most to least costly. A pawn loan limits your loss to the pledged item, while payday and title defaults can reach your bank account or your car.
The rollover cycle in numbers
The payday business model runs on repeat borrowing. The CFPB found that 80 percent of payday loans are rolled over or re-borrowed within two weeks, and that the median borrower takes ten loans a year. The lump-sum structure produces this: the full balance comes due on your next payday, the exact day the original shortfall tends to repeat.
Run the arithmetic on a $400 loan at $15 per $100. Each period costs $60, so nine rollovers, ten periods in all, means $600 in fees to hold $400 for about 20 weeks. The same $400 through a credit union PAL at 28 percent, repaid in installments over those 20 weeks, would cost around $22 in interest. The gap, nearly $580, is the premium the payday structure extracts from the borrowers least able to spare it.
State law sets the menu
Payday lending is governed state by state, and the differences are stark. Some states prohibit the product entirely. Others cap the full cost of small loans near a 36 percent annual rate, a ban in practice, since no lender writes two-week loans at that price. States that permit payday lending attach their own conditions: caps on how many loans you can hold at once, mandatory cooling-off periods, rollover limits, or a required extended payment plan for borrowers who fall behind.
The practical upshot is that the same $500 loan can be illegal, capped, or a 391 percent product depending on your address. An online lender's willingness to lend says nothing about whether the loan is legal in your state, and illegally made loans are often unenforceable in part or in full. Check your state regulator's consumer pages before assuming the contract means what it says.
Cheaper options, in rough price order
Earned wage access sits at the free end: programs offered through employers, or apps like Payactiv and DailyPay, release money you have already earned for little or nothing. Cash advance apps such as Earnin, Dave, and Brigit front $50 to $500 for tips or monthly fees of $3 to $10. Credit union PALs cap at 28 percent APR in amounts of $200 to $2,000. Online personal loans reach credit scores as low as 580 at 15 to 36 percent. A credit card cash advance costs 25 to 30 percent APR plus a one-time fee of 3 to 5 percent, still a small fraction of payday pricing.
Beneath all of those sit the options with no repayment at all: the 211 helpline, community action agencies, and local charities that make emergency grants, plus the creditor you were going to pay with the loan, who may simply accept a payment plan if asked.
Protections you already have
A few rules work in your favor before you ever negotiate. The Military Lending Act caps loans to active-duty service members and their dependents at a 36 percent all-in annual rate across payday, title, and similar products; the CFPB's consumer pages explain who is covered. Many states require lenders to offer an extended payment plan at no added fee, and you generally have the right to revoke a lender's ACH access to your bank account in writing. If a lender ignores any of this, keep the paperwork and file complaints with both the CFPB and your state attorney general.
The durable fix is a small buffer. Setting aside $25 from each paycheck reaches about $650 in a year, roughly the size of the shortfall that sends most people to a payday storefront. An automatic transfer on payday builds it without willpower.