Interest per day on a payday loan
UK payday interest is the amount outstanding multiplied by the daily rate. At 0.8% a day on £300 it is £2.40 a day. Over 30 days that is £72.00 and you repay £372.00. A £750 loan at 0.5% a day costs £3.75 a day, or £52.50 over 14 days.
There is no interest on interest: the FCA requires simple interest only (CONC 5A.2.19R). If you pay part of the loan, interest after that day is charged on what is left.
When the cap stops the interest
Interest and charges cannot be more than the amount borrowed (CONC 5A.2.2R). At 0.8% a day that limit is reached after 125.0 days. A £100 loan held for 200 days would add £100.00 of interest at most, so the total is £200.00. The calculator stops the interest at that point and says so.
Daily rate, simple yearly rate and APR
Multiplying 0.8% by 365 gives a simple yearly rate of 292.00%. The effective APR for a 30-day loan is 1,269.72%, because the APR compounds the charge over a year. The daily rate is the cost that matters when you borrow for days.
To add a late payment or instalments, use the UK payday loan calculator.
For a flat fee per $100, see the US daily interest on payday loan calculator.
Inputs for the UK daily interest calculator
Amount borrowed
The amount interest is charged on.
Daily interest rate
Percent of the amount borrowed charged each day. The legal cap is 0.8%.
Days borrowed
How many days you keep the loan, from 1 to 365.
CALCULATOR QUESTIONS
UK daily interest on payday loan calculator questions
How do you calculate daily interest on a payday loan?
Multiply the amount borrowed by the daily rate. £300 at 0.8% a day is £2.40 a day.
How much does a £300 payday loan cost for 30 days?
£72.00 in interest, so £372.00 to repay, at the maximum 0.8% a day.
After how many days does the cap stop interest?
At 0.8% a day, after 125.0 days, when the interest equals the amount borrowed.
Is payday loan interest compounded?
No. UK rules allow simple interest only on these loans, so interest is charged on the amount you still owe, not on earlier interest (CONC 5A.2.19R).