Borrowing Smart · Data

The Real Cost of a $500 Payday Loan in Every State (2026 Data)

Q: Which state has the cheapest payday loans?

Among states that still allow single-payment payday loans, those with lower fee caps such as Florida ($10 per $100 plus a small verification fee) and Indiana (a tiered cap near 15%) are among the least expensive. Several states have replaced payday loans with 36% APR installment products that cost far less.

Q: Why is the APR on a $500 payday loan so high?

APR annualizes a fee that is only charged for about two weeks. A $75 fee on $500 is 15% of the amount, but because the loan lasts roughly 14 days, multiplying it out to a full year produces an APR around 391%. The dollar fee is what you actually pay if you repay on time.

Q: Are payday loans illegal in some states?

Yes. About 14 states and the District of Columbia effectively prohibit high-cost single-payment payday loans, usually by capping APR at or near 36%. In those states, lenders offer small installment loans, or borrowers turn to credit-union PAL loans and other alternatives.

Maria Keller · Consumer credit analyst ✓ Fact-checked Updated June 8, 2026 · 9 min read

Illustration of a $500 bill split into different fee amounts across U.S. states

⚡ Key takeaways

In states that allow payday lending, a $500 loan for 14 days usually costs $58–$90 in fees — an APR of roughly 300% to 460%.
The cheapest legal states run about $10–$12 per $100 borrowed; the priciest hit $17.65 or more.
14 states plus Washington, D.C. effectively ban single-payment payday loans, usually with a 36% APR cap.
The dollar fee — not the scary APR — is what you actually pay if you repay on time. Rollovers and late fees are where costs explode.
A credit-union PAL loan caps the same kind of borrowing at a 28% APR — often a fraction of the cost.

A $500 payday loan does not cost the same thing in California as it does in Florida or Texas. The fee is set by your state's law, not by the lender's mood — and the spread is real money. Borrow $500 for two weeks and you might pay $58 in one state and $90 in another for the exact same cash, the exact same term, the exact same due date. In fourteen states you can't get that loan at all, because the law caps the rate too low for a single-payment payday product to exist.

We pulled the fee caps that each state regulator publishes for 2026, ran them against a clean $500 / 14-day example, and built the comparison table below. Use it to see roughly what you'd pay where you live — and to spot when the number you're being quoted is higher than your state actually allows.

How we calculated the cost

Every figure here uses the same simple example so the states are comparable: borrow $500, single payment, 14-day term, repaid on time, no rollover. The fee comes from each state's statutory cap, expressed as a charge per $100 borrowed. Total repayment is $500 plus that fee. APR annualizes the fee using the standard formula lenders are required to disclose under the federal Truth in Lending Act:

The APR formulaAPR = (fee ÷ amount) × (365 ÷ days) × 100. For a $75 fee on $500 over 14 days: (75 ÷ 500) × (365 ÷ 14) × 100 ≈ 391%. The same dollar fee on a longer term produces a lower APR — which is why term length matters as much as the fee itself.

One caveat before the table: some states allow extra charges a flat per-$100 cap doesn't capture — verification fees, database fees, or a separate finance charge on the first chunk of the loan. We note those, but your final lender disclosure is always the number that governs. Treat this as a well-sourced estimate, not a quote.

What a $500 payday loan costs, state by state

Sorted roughly from least to most expensive among states that allow the loan. "Prohibited" means the state's rate cap is low enough that single-payment payday lending isn't offered there.

State	Fee per $100	Fee on $500	You repay	APR (14-day)*
Florida	$10 + $5 verif.	$55	$555	≈287%
Indiana	~$11.50 tiered	$57.50	$557.50	≈300%
Michigan	~$11.20 tiered	$56	$556	≈292%
Alabama	$17.50	$87.50	$587.50	≈456%
California	$17.65	$88.25	$588.25	≈460%
Mississippi	$20	$100	$600	≈521%
Louisiana	$16.75 + fee	$88.75	$588.75	≈463%
Texas (CAB model)	varies, high	~$110–$160	~$610–$660	≈570–660%
Nevada	no rate cap	~$75–$110	~$575–$610	≈390–570%
Ohio	capped installment	~$45–$70	~$545–$570	≈138% (term)
New York	—	—	—	🚫 Prohibited
New Jersey	—	—	—	🚫 Prohibited

*APR figures assume a 14-day single-payment term and are for comparison only. Texas loans are arranged through a credit-access-business (CAB) model that layers a broker fee on top of a small interest charge, which is why its effective cost runs higher than a flat per-$100 state. Ohio reformed payday lending in 2018 into a capped installment product, so its term is longer and its APR is measured differently. Figures reviewed June 2026 against state regulator publications and the CFPB; rules change — confirm with your lender's disclosure and our Loans by State pages.

Why two states with the "same" loan differ by $35

The driver is the per-$100 fee cap. Florida caps the finance charge at $10 per $100 (plus a one-time $5 verification fee), so a $500 loan costs $55. California allows $17.65 per $100, pushing the same loan to $88.25. That's a $33 difference for identical cash over identical time — about a tank and a half of gas — decided entirely by which side of a state line you live on.

The fee cap is the whole game. The lender doesn't choose your price — your state legislature did, years ago, and most borrowers never see the number written down.

Term length matters too. Ohio's 2018 reform stretched repayment into installments and hard-capped total cost, so even though the dollar fee can look similar, the borrower isn't hit with a single balloon payment two weeks later. That structural change is why Ohio sits so much lower on an annualized basis than its neighbors.

The number that actually bites: rollovers

Every figure above assumes you repay on time. The real cost of payday lending shows up when you can't. Roll a $500 California loan once and you pay the $88 fee twice — $176 — to borrow the same $500 for a month. Industry data the CFPB has published repeatedly shows the majority of payday fee revenue comes from borrowers who re-borrow within a pay period, not from one-and-done loans. If you're already worried about repaying, the honest move is to look at a cheaper structure before you sign, not after.

A payday loan is for a short gap, not a budget hole. If you'd need to roll the loan over to repay it, the APR stops being theoretical. Before borrowing, check whether a credit-union PAL loan (28% APR cap), a paycheck advance, or your state's required extended payment plan would cost less. See our Responsible Lending resources.

If your state caps payday loans

The 14 states (plus D.C.) that effectively ban single-payment payday loans didn't leave borrowers without options — they pushed the market toward lower-cost products. In New York, New Jersey, Connecticut and similar states, you'll find small-dollar installment loans, credit-union lending, and employer or bank advance programs instead. Those aren't a loophole; they're the legal alternative, and they're usually cheaper. Our bad-credit loans guide covers what's realistically available when your score is low and your state cap is strict.

The bottom line

A $500 payday loan repaid on time costs somewhere between roughly $55 and $110 depending on your state — and zero in the fourteen states where it's banned in favor of cheaper products. Know your state's per-$100 cap before you borrow, never accept a quote above it, and treat the APR as a warning label about what a rollover would do. If the math looks tight, the cheaper path almost always exists; it's just less advertised. Compare the full breakdown on our Rates & Fees page before you decide.

Frequently asked questions

What is the average cost of a $500 payday loan?

In states that allow payday lending, a $500 single-payment loan for about two weeks typically costs $58 to $90 in fees — roughly a 300% to 460% APR. The exact figure depends on your state's fee cap.

Which state has the cheapest payday loans?

Among states that still allow single-payment loans, lower-cap states such as Florida ($10 per $100 plus a small verification fee), Indiana and Michigan are among the least expensive. Several reformed states have replaced payday loans with 36%-APR installment products that cost far less.

Why is the APR on a $500 payday loan so high?

APR annualizes a fee that's only charged for about two weeks. A $75 fee is 15% of $500, but stretched across a full year that's an APR near 391%. The dollar fee is what you actually pay if you repay on time; the APR shows what it would cost if the loan ran a year.

Are payday loans illegal in some states?

Yes. About 14 states plus Washington, D.C. effectively prohibit high-cost single-payment payday loans, usually by capping APR at or near 36%. In those states, lenders offer small installment loans and borrowers use credit-union PAL loans and other alternatives.

Sources

Consumer Financial Protection Bureau (CFPB) — research on payday loan reborrowing and the cost of short-term credit, consumerfinance.gov
California Department of Financial Protection & Innovation — California Deferred Deposit Transaction Law fee schedule
Florida Office of Financial Regulation — Deferred Presentment Transactions fee and verification rules
Texas Office of Consumer Credit Commissioner — credit access business (CAB) fee reporting
Ohio Department of Commerce, Division of Financial Institutions — Short-Term Loan Act (2018 reform)
National Conference of State Legislatures (NCSL) — payday lending state statutes overview

Written by Maria Keller, consumer credit analyst. Reviewed and updated June 8, 2026. This article is educational and not financial advice; verify current rules with your state regulator and lender disclosure.