Short-term loans can be fast, but they are among the most expensive ways to borrow. The figures below come from the U.S. Consumer Financial Protection Bureau (CFPB) — not from us, and not from any single lender.
According to the CFPB, a typical two-week payday loan carrying a $15 fee for every $100 borrowed works out to an annual percentage rate (APR) of almost 400%. By comparison, the CFPB notes that credit card APRs generally run from about 12% to about 30%. The fee may look small as a flat dollar amount, but because the loan term is so short, the APR is very high.
Federal law requires a lender to disclose the APR and other costs before you agree to a loan. If a provider won't show you the APR and the total repayment amount, that's a serious red flag.
The CFPB says the finance charge commonly ranges from $10 to $30 per $100 borrowed, and many states cap the fee and the maximum loan amount. Some states do not permit payday lending at all. Where you live changes both what you can borrow and what it costs, so always check your own state's rules.
The structure of these loans — small amounts, very short terms, repaid in a lump sum — makes them easy to roll over and hard to escape. CFPB research has found that most payday borrowers end up re-borrowing, and a short-term loan can quietly turn into a long, expensive cycle of fees. Borrow only what you can realistically repay on the due date.
Before taking a high-cost short-term loan, it's worth checking whether any of these fit your situation:
None of these is guaranteed to be available to you, but each is generally cheaper than a payday loan.
Bear Loans USA earns referral or advertising fees from third-party providers. We share the regulator-sourced facts above so you can make an informed decision — including the decision not to borrow.