Last updated: October 30, 2025
When cash is tight and you need to borrow money until payday, it’s tempting to turn to a payday loan or payday advance app. However, unexpected fees could come with them.
The hidden costs of payday loans
According to the Consumer Financial Protection Bureau (CFPB), payday loans typically charge fees of about $15 per $100. For a $300 loan, that means paying $345 in just two weeks—a jaw-dropping APR of about 400%.1
If you can’t repay on time, many lenders let you roll over the loan for another period. That means you have to pay another fee, still owe the full amount, and the debt balloons. For example, four months of rollovers could cost you $360 in fees, yet you’d still owe the original $300 principal.1
The CFPB also found that four in five payday loans are rolled over or renewed within two weeks. This could trap borrowers in a cycle of debt where fees exceed original loans.1
Watch out for late fees with payday advance apps
While payday advance apps and payday loans are often marketed as quick and easy ways to access cash, many come with high late fees. Before using any payday advance service, it’s important to read the fine print and choose an app with transparent terms, no hidden fees, and a flexible repayment schedule that works for you.
Give ExtraCash™ a try
Looking for an interest-free payday loan is like finding a needle in a haystack. Don’t get discouraged, there are alternatives that don’t cost you an arm and a leg. Check out the Dave app’s most popular product, ExtraCash™. It’s not a payday loan or a payday advance, but it is a way to get money when you need it. With ExtraCash™, you could qualify for up to $500 in 5 min or less.2 And there’s no credit check, interest, or late fees.