The Short Answer

For a typical two-week $500 payday loan in Dallas, you can expect to pay between $575 and $650 to repay it in full when it's due. This represents finance charges and fees of $75 to $150.

However, the real cost is best expressed as an Annual Percentage Rate (APR), which would be 391% to 662% or even higher.

Detailed Breakdown and Explanation

Texas is one of the few states that does not cap the fees payday lenders can charge. This means costs can vary significantly from one lender to another, but they are consistently very expensive.

1. Standard Fee Structure

Lenders in Dallas typically charge a set fee for every $100 borrowed. The common range is $15 to $30 per $100.

  • Calculation for a $500 loan:

    • Minimum Cost: ($15 fee / $100) x 500 = $75 in fees. Total Repayment = $575

    • Maximum Cost: ($30 fee / $100) x 500 = $150 in fees. Total Repayment = $650

2. The Annual Percentage Rate (APR) - The True Measure of Cost

The APR translates the cost of the loan into an annualized interest rate, allowing for easy comparison with other forms of credit. This is where the cost becomes startling.

  • Formula: (Finance Charge / Loan Amount) x (Number of Days in a Year / Loan Term) x 100

  • For a 14-day (2-week) loan with a $75 fee:

    • ($75 / $500) x (365 days / 14 days) x 100

    • (0.15) x (26.07) x 100 = 391% APR

  • For a 14-day loan with a $150 fee:

    • ($150 / $500) x (365 days / 14 days) x 100

    • (0.30) x (26.07) x 100 = 782% APR

As you can see, the APR for a simple two-week loan can easily reach nearly 800%.

The Biggest Danger: The Debt Trap

The exorbitant cost is only one part of the risk. The real danger for most borrowers is the inability to repay the full amount on their next payday, leading to a cycle of debt.

  • Rollover/Renewal: If you can't repay the $575-$650, the lender will often offer to "roll over" or "renew" the loan.

  • New Fees: You will have to pay another round of fees (another $75-$150) just to extend the due date. The principal $500 loan remains.

  • Cycle of Debt: This cycle can repeat, causing a borrower to pay hundreds of dollars in fees without ever reducing the original $500 debt. It is not uncommon for borrowers to end up paying more in fees than the original amount they borrowed.

Example of Total Cost if Rolled Over



Action Amount Needed to Pay What Happens
Take out the loan You receive $500. Fees of $150 are added. You owe $650 on your next payday.
First Payday (Can't repay) You pay a $150 renewal fee. The $500 principal is still owed. A new fee of $150 is added. You now owe $800.
Second Payday You must pay $800. If you can't, you may pay another $150 fee, and now owe $950.

In this example, after just two renewals, you would have paid $300 in fees and still owe the original $500.

Safer Alternatives in Dallas

Before choosing a payday loan, please consider these alternatives:

  1. Payment Plans: Contact your bill providers (utilities, rent, medical) and ask for an extension or payment plan. They are often willing to work with you.

  2. Credit Union Small Loan: Local credit unions like Dallas Metro Credit Union or Credit Union of Texas offer Payday Alternative Loans (PALs) with maximum APRs of 28%. These are a much cheaper option.

  3. Local Assistance Programs: Organizations like Diana's Food Pantry or various churches and non-profits in the DFW area may offer assistance with rent, utilities, or food to help you through a short-term crisis.

  4. Side Gigs: Consider a short-term gig (driving for Uber/Lyft, DoorDash, TaskRabbit) to generate quick cash without debt.

  5. Cash Advance on Credit Card: While still expensive (typically 25-35% APR plus a fee), it is drastically cheaper than a 400-800% APR payday loan.

Conclusion: A $500 payday loan in Dallas will cost a minimum of $75 and likely more, translating to an APR of nearly 400% or higher. The structure of the product makes it very likely to trap borrowers in a costly cycle of debt. It is strongly advised to explore every possible alternative before resorting to a payday loan.