How Much Does a $1,000 Payday Loan Really Cost You?
Facing an unexpected expense and need $1,000 fast? Avoid common pitfalls by understanding how different loan types compare in cost and repayment. We g...
- Learn about the costs of a payday loan, specifically for $1,000
- Compare affordable $1,000 payday loan alternatives
- Compare APRs, fees and terms from major lenders
- Make an educated decision on the right loan type for you
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A $1,000 payday loan typically costs between $1,150 to $1,300 if repaid in two weeks, but can escalate to $1,600 or more with rollovers.
Here's the breakdown: payday lenders charge between $15-$30 per $100 borrowed, meaning you'll pay $150-$300 in fees just to borrow $1,000 for 14 days.
Let's take a deep dive into all the information you need before you use a payday loan, as well as looking at Financer's top broker recommendations for this scenario.
Calculating Your Exact APR
Want to know the true cost of any payday loan? Use this formula:
APR = (Fee ÷ Loan Amount) × (365 ÷ Loan Term in Days) × 100
Example 1: Standard 2-week loan
- $1,000 loan with $200 fee for 14 days
- APR = ($200 ÷ $1,000) × (365 ÷ 14) × 100 = 521%
Example 2: After one rollover (28 days total)
- $1,000 loan with $400 total fees for 28 days
- APR = ($400 ÷ $1,000) × (365 ÷ 28) × 100 = 521%
Notice the APR stays the same because you're paying the same rate for each 2-week period.
Payday Loan Costs Comparison
Here's a quick snapshot of how the APR and costs of a payday loan compare to your other loan options:
| Loan Type | Average APR | 2-Week Cost | 6-Month Cost | Total Repaid |
|---|---|---|---|---|
| Payday Loan | 521% | $200 | $1,400 | $2,400 |
| Personal Loan | 15% | $6 | $75 | $1,075 |
| Credit Union PAL | 28% | $11 | $140 | $1,140 |
| Credit Card Advance | 25% | $10 | $125 | $1,125 |
| Family/Friend | 0% | $0 | $0 | $1,000 |
We can clearly see that payday loans cost significantly more than other types of loan options.
Best Payday Loan Options
Take a look at our article: Best Payday Loans in 2025
Our Recommended Brokers
- Lending For Bad Credit - Connects applicants with their huge network of lending partners
- 5KFunds - Flexible repayment periods, rates as low as personal loans
- LoansUnder36 - Specializes in 36% APR cap loans
- GetCash.com - Quick approval with better terms than most payday loans
- PersonalLoans.com - Wide network of lenders for various credit scores
What Happens When You Can't Repay
Here's where payday loans become truly expensive. If you can't repay your $1,000 loan plus fees in two weeks, you'll likely "roll over" the loan. Each rollover adds another fee.
Using the $20 per $100 example:
- Week 2: Owe $1,200, can't pay, roll over for $200 fee
- Week 4: Now owe $1,400
- Week 6: Roll over again, now owe $1,600
- Week 8: Roll over again, now owe $1,800
After just two months, you've paid $800 in fees on a $1,000 loan and still owe the original $1,000.
The Hidden Costs: Overdraft Fees
Here's a cost most people don't see coming: bank overdraft fees.
When payday lenders try to collect payment from an empty account, your bank charges overdraft fees of $35 or more per attempt.
27% of payday borrowers report overdrafting their accounts because of these loans. Before the new federal rule, lenders could attempt collection multiple times, triggering $35+ fees each time. Some borrowers faced $200+ in overdraft fees on top of their original loan cost.
Better Alternatives To Consider
Before taking a $1,000 payday loan, explore these options:
Lower-Cost Loan Options
Credit Union PALs: $200-$2,000 loans at maximum 28% APR with 1-12 month terms
Personal loans: 6.5%-35.99% APR with longer repayment terms
Secured loans: Use collateral for rates as low as 10% APR
Employer payroll advance: Many employers offer fee-free paycheck advances
Credit card cash advance: Even at 25% APR, much cheaper than payday loans
Non-Loan Solutions
Negotiate with creditors: Many will accept payment plans instead of late fees
Community assistance: Local churches, nonprofits often provide emergency funds
Sell items: Quick cash from unused electronics, jewelry, or furniture
Gig work: Uber, DoorDash, TaskRabbit for immediate income
Family/friends: Interest-free borrowing with clear repayment terms
Pros and Cons of a $1,000 Payday Loan
Let's be honest about both sides:
Pros
Lightning-fast approval: Get money within 24 hours, sometimes same-day
No credit check required: Approval based on income, not credit score
Simple application: Apply online in minutes with minimal paperwork
No collateral needed: Unlike car title loans, you don't risk losing assets
Cons
Extremely high cost: APRs of 391%-782% are among the highest legal rates
Short repayment window: Full payment due in just 2-4 weeks
Debt trap design: 80% of loans aren't repaid on time, leading to rollovers
Overdraft fee risk: Failed payment attempts can trigger $35+ bank fees
No credit building: Payments don't improve your credit score
The Bottom Line
A $1,000 payday loan costs $1,150-$1,300 if repaid in two weeks, but most borrowers can't repay that quickly. The average borrower ends up paying $520 in fees to borrow just $375.
Before choosing a payday loan, explore credit union PALs, personal loans, or even credit card advances - all offer significantly lower costs.
For more information check out our article on alternative loan options or our comparison for payday loan brokers.
FAQs
How much would a $1,000 payday loan cost in total with fees and interest?
A $1,000 payday loan costs $1,150-$1,300 if repaid in two weeks ($150-$300 in fees). However, 80% of borrowers can't repay on time. After six months of rollovers, you could pay $1,400+ in fees alone while still owing the original $1,000.
How much would a $1,000 payday loan cost per month in payments?
Payday loans aren't designed for monthly payments - they're due in full within 2-4 weeks. If you roll over a $1,000 loan monthly, you'd pay $200-$300 in fees each month while the principal balance remains unchanged.
How much would a $1,000 payday loan cost if paid back in 2 weeks?
If paid back in exactly 2 weeks as intended, a $1,000 payday loan costs $150-$300 in fees, depending on the lender's rate ($15-$30 per $100 borrowed). Your total repayment would be $1,150-$1,300.
How do payday loan costs compare to credit cards?
Payday loans are dramatically more expensive. A $1,000 payday loan costs $150-$300 in fees over two weeks (391%-782% APR), while a credit card at 25% APR would charge about $10 in interest over the same period. Even credit card cash advances are significantly cheaper than payday loans.