The Consumer Action Law Centre has launched a calculator to allow consumers to work out the cost of a payday loan.The calculator uses the formula for calculating an annual rate set out in section 32 of the National Credit Code.Payday loans are usually paid back in a period of weeks or months and it is hard for consumers to compare what they are paying with the rate they would pay on conventional personal loans.Provisions of the National Consumer Credit Protection Act that apply specifically to small amount credit contracts impose a cap on fees and charges of a 20 per cent establishment fee and a monthly fee of four per cent.According to CALC's calculator, a $2000 loan taken out for four months would have an establishment fee of $400 and a monthly fee of $80 a month. The consumer would pay the equivalent of an annualised percentage rate of 163 per cent.CALC said an annualised percentage rate was the most appropriate way to measure the cost of a small amount credit contract because it was easily understood and could be compared with other credit products.CALC said it welcomed the recommendation of the Review of Small Amount Credit Contract Laws that an annualised percentage rate for payday loans and consumer leases be disclosed to consumers.CALC said the recommendations did not go far enough and called for a rate cap of 48 per cent APR on payday loans and consumer leases.The SACC review, released last month, recommended that consumer leases be subject to a cap on total repayments for the first time.It also recommended that the protected earnings amount rule be extended. Under the current rule total SACC repayments cannot exceed 20 per cent of gross income for Centrelink recipients. The review panel has recommended changing the cap to ten per cent of net income each repayment period and applying it to all consumers.CALC applauded Google's decision, announced last week, to ban the advertising of payday loans on its search engine.