Guide
How a small fee becomes a big APR
Checked against the sources below on 2026-10-18.
In short: The APR of an advance is its total cost divided by the amount, scaled to a year. Because advances last days, not years, even a few dollars works out to a high rate; the dollar amount and the APR together tell the real story.
The formula
APR = total cost ÷ amount advanced × 365 ÷ days until repaid. It answers one question: if you paid at this rate for a whole year, what share of the money would it cost you?
Worked examples
All on a $100 advance. The fees are example amounts, not any particular app’s; each app’s real fees are on its page.
| Example | Cost | APR |
|---|---|---|
| $3.99 instant fee, repaid in 14 days | $3.99 | 104% |
| Same fee, repaid in 7 days | $3.99 | 208.1% |
| $9.99 required monthly membership, one advance that month, 14 days | $9.99 | 260.5% |
| Same membership, two advances that month | $5.00 each | 130.2% |
| $3.99 instant fee plus a $3 tip, 14 days | $6.99 | 182.2% |
| For comparison: $15 per $100 payday loan, 14 days | $15.00 | 391.1% |
The last row matches the CFPB’s own example: a two-week payday loan at $15 per $100 “equates to an annual percentage rate (APR) of almost 400 percent.”
Three things that move the number
1. Days until repayment
The same fee over fewer days is a higher APR. If an app takes the money back on your next payday, the days depend on when in your pay cycle you borrow.
2. Instant vs standard transfer
Many apps charge only for instant delivery and offer a slower transfer at no fee. If the slower option arrives in time, the cost of the advance can fall to zero (before any membership or tip).
3. Memberships and tips
A monthly fee you must pay to get advances is part of what each advance costs you, and it weighs most when you borrow once a month. Tips are optional, but if you pay one, it counts too.
Why show the APR at all?
Because it is the only way to compare options with different lengths on the same scale: an advance, a payday loan, a credit union loan, a credit card. The dollar figure tells you what this one costs; the APR tells you how expensive the money is. We show both. Providers often say their fees aren’t interest, and current federal guidance doesn’t require some of them to show an APR (details), so this is our comparison number, not a legal disclosure. See How we calculate.
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Sources
Checked 2026-10-18. Information only, not financial or legal advice.