Quick answer: APR expresses many borrowing costs as an annual rate, helping compare products. A short-term loan can have a very high annualized cost even when the dollar fee seems small.
Principal, interest and fees
Principal is the amount borrowed. Interest is a charge based on the balance and rate. Fees may include origination, subscription, expedited-funding, late or returned-payment charges.
Why loan length matters
A $15 fee on a $100 advance for two weeks is not “15% per year.” Annualizing a short fee produces a much larger percentage because the borrowing period is brief.
What to compare
| Measure | Question |
|---|---|
| Amount received | How much money reaches you? |
| Total repayment | How much leaves your account? |
| Payment timing | Can your budget absorb each payment? |
| Mandatory fees | Which fees cannot be avoided? |
| Optional fees | Are faster funding or tips truly optional? |
Use the calculators
Estimate instalment loan cost or annualize a short-term fee.