Truth in Lending: 5.5.7 Calculation of the APR in Single-Advance Single-Payment Transactions and Demand Obligations
A payday loan is an example of a single advance, single payment transaction. The lender advances a sum of money in a single installment, and the borrower is typically required to repay it a week or two later in a single payment. For these transactions, if the term is exactly one month (or some other whole number of months), then the APR is calculated as twelve times the rate for one month.220 Pawn transactions are another example.