Cash Advance Interest Calculator
This calculator helps you estimate the simple interest charged on a cash advance based on the principal amount, the annual interest rate (APR), and the number of days the advance is outstanding.
Note: This calculator estimates simple interest only. It does not include fees (like cash advance fees), compounding interest (if applicable to your specific advance terms), or any other charges. Always refer to your lender's terms for exact costs.
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Understanding Cash Advance Interest Calculation
How is Simple Interest Calculated?
Cash advance interest is typically calculated daily as simple interest. The formula is:
Interest = Principal × Daily Rate × Number of Days
Where the Daily Rate is derived from the Annual Percentage Rate (APR):
Daily Rate = (APR / 100) / 365 (Assumes 365 days per year)
Example Calculation Steps:
Let's calculate the interest on a $500 advance at 25% APR for 30 days:
- Principal = $500
- APR = 25%
- Days = 30
1. Calculate Daily Rate:
Daily Rate = (25 / 100) / 365 = 0.25 / 365 ≈ 0.0006849
2. Calculate Total Interest:
Interest = Principal × Daily Rate × Days
Interest = 500 × 0.0006849 × 30
Interest ≈ $10.27
So, the estimated simple interest is about $10.27.
Cash Advance Interest Examples
Click on an example to see the calculation:
Example 1: $100 at 30% APR for 15 Days
Scenario: Calculate interest on a small, short-term advance.
Inputs: Principal = $100, APR = 30%, Days = 15
Calculation:
Daily Rate = (30 / 100) / 365 ≈ 0.0008219
Interest = 100 × 0.0008219 × 15 ≈ $1.23
Result: Estimated Interest = $1.23
Example 2: $1000 at 20% APR for 60 Days
Scenario: A larger advance for a longer period.
Inputs: Principal = $1000, APR = 20%, Days = 60
Calculation:
Daily Rate = (20 / 100) / 365 ≈ 0.0005479
Interest = 1000 × 0.0005479 × 60 ≈ $32.87
Result: Estimated Interest = $32.87
Example 3: $300 at 28% APR for 7 Days
Scenario: A quick, small amount advance.
Inputs: Principal = $300, APR = 28%, Days = 7
Calculation:
Daily Rate = (28 / 100) / 365 ≈ 0.0007671
Interest = 300 × 0.0007671 × 7 ≈ $1.61
Result: Estimated Interest = $1.61
Example 4: $750 at 35% APR for 45 Days
Scenario: Estimating interest with a higher APR.
Inputs: Principal = $750, APR = 35%, Days = 45
Calculation:
Daily Rate = (35 / 100) / 365 ≈ 0.0009589
Interest = 750 × 0.0009589 × 45 ≈ $32.36
Result: Estimated Interest = $32.36
Example 5: $2000 at 18% APR for 90 Days
Scenario: A larger advance for three months.
Inputs: Principal = $2000, APR = 18%, Days = 90
Calculation:
Daily Rate = (18 / 100) / 365 ≈ 0.0004932
Interest = 2000 × 0.0004932 × 90 ≈ $88.78
Result: Estimated Interest = $88.78
Example 6: $500 at 29.99% APR for 30 Days
Scenario: A common APR and duration example.
Inputs: Principal = $500, APR = 29.99%, Days = 30
Calculation:
Daily Rate = (29.99 / 100) / 365 ≈ 0.0008216
Interest = 500 × 0.0008216 × 30 ≈ $12.32
Result: Estimated Interest = $12.32
Example 7: $1500 at 24% APR for 120 Days
Scenario: A moderate advance for four months.
Inputs: Principal = $1500, APR = 24%, Days = 120
Calculation:
Daily Rate = (24 / 100) / 365 ≈ 0.0006575
Interest = 1500 × 0.0006575 × 120 ≈ $118.35
Result: Estimated Interest = $118.35
Example 8: $250 at 40% APR for 10 Days
Scenario: Illustrating high interest on a small, very short advance.
Inputs: Principal = $250, APR = 40%, Days = 10
Calculation:
Daily Rate = (40 / 100) / 365 ≈ 0.0010959
Interest = 250 × 0.0010959 × 10 ≈ $2.74
Result: Estimated Interest = $2.74
Example 9: $600 at 26% APR for 50 Days
Scenario: Another typical scenario.
Inputs: Principal = $600, APR = 26%, Days = 50
Calculation:
Daily Rate = (26 / 100) / 365 ≈ 0.0007123
Interest = 600 × 0.0007123 × 50 ≈ $21.37
Result: Estimated Interest = $21.37
Example 10: $1000 at 32% APR for 180 Days
Scenario: A longer duration advance example.
Inputs: Principal = $1000, APR = 32%, Days = 180
Calculation:
Daily Rate = (32 / 100) / 365 ≈ 0.0008767
Interest = 1000 × 0.0008767 × 180 ≈ $157.81
Result: Estimated Interest = $157.81
Frequently Asked Questions about Cash Advance Interest
1. What is APR and how is it used here?
APR stands for Annual Percentage Rate. It represents the annual cost of borrowing as a percentage. This calculator converts the annual APR into a daily rate by dividing by 365 days.
2. Does this calculator include cash advance fees?
No, this calculator estimates the simple interest charged based on the principal, APR, and duration only. Most cash advances also charge a separate fee (often a percentage of the advance amount or a flat fee), which is not included in this calculation but adds to the total cost.
3. Is the interest compounded?
Cash advance interest is typically calculated daily as simple interest on the outstanding balance. This calculator assumes simple interest. If you don't pay the interest, it might be added to the principal in some cases (compounding), but this calculator models the basic daily simple interest calculation.
4. Why does the formula divide APR by 365?
Interest rates (like APR) are typically annual rates. To calculate the interest accrued *per day*, we convert the annual rate to a daily decimal rate by dividing the percentage by 100 and then dividing by the number of days in a year (365, ignoring leap years for simplicity in standard calculations like this).
5. What are typical APRs for cash advances?
APRs for cash advances are often significantly higher than for regular purchases or personal loans, commonly ranging from 20% to over 30% or even higher, plus fees. Always check your specific cardholder agreement or loan terms.
6. Does paying the advance back early save me interest?
Yes, absolutely. Since interest is calculated daily based on the outstanding balance, paying back the cash advance sooner will reduce the number of days interest is charged, thereby lowering the total simple interest cost.
7. Does this calculate my total repayment amount?
No. This calculator only estimates the simple interest portion. The total amount you would repay is the original principal amount PLUS the calculated simple interest PLUS any applicable cash advance fees (which this calculator doesn't include) and potentially other charges.
8. Can I use this for other types of loans?
This calculator is specifically designed for estimating simple daily interest on cash advances. While the basic formula is similar to simple interest loans, it is not suitable for complex loans with varying payment schedules, amortization, or different compounding frequencies (like mortgages or auto loans).
9. What are the valid input values?
The Cash Advance Amount (Principal) must be a positive number (greater than 0). The Annual Interest Rate (APR %) must be a positive number (greater than 0). The Duration (Number of Days) must be a positive whole number (integer greater than or equal to 1).
10. Why is cash advance interest often so high?
Cash advances are typically unsecured loans, meaning there's no collateral. They offer immediate access to funds, which lenders see as a higher risk. The higher interest rates and fees compensate the lender for this higher risk and the convenience provided.
