Line of Credit Interest Calculator

What a line of credit interest calculator actually measures

A personal line of credit or overdraft line lets you draw funds up to an approved limit and repay over time, similar to a credit card but usually with a lower rate and a cash-access feature. Interest is charged only on the amount you've actually drawn, not on your full credit limit, so the same $25,000 limit can cost very different amounts depending on how much you use and for how long.

• Interest accrues on the drawn balance, not the credit limit
• Interest is calculated daily and compounds into the balance you owe
• Accrued interest is billed on your statement's billing cycle date

Reading the input and result panels

On the left, enter the amount drawn, your APR, the draw date, days outstanding, and your interest billing day — or tap a quick-select chip for a common amount, rate, or period. On the right, the estimated total interest appears in large type, followed by a bar comparing the drawn amount to interest, a chart of cumulative interest over time, and your interest per day and per 30 days. Below both panels, the billing-cycle table shows the interest and running total for each statement period based on your billing day.

The daily interest formula, with a worked example

Daily interest equals the amount drawn times the APR, divided by the number of days in the year. This calculator sums that daily figure across every day you're outstanding to produce your estimated total. For example, $10,000 drawn at 12% APR for 30 days works out to ($10,000 × 0.12 × 30) ÷ 365 ≈ $98.63 in total interest, or about $3.29 per day.

• Daily interest = amount drawn × APR ÷ days in the year (365 or 366)
• Estimated total interest = daily interest summed across the days outstanding
• Interest per day = estimated total interest ÷ days outstanding

Why divide by 365 — and why some lenders use 360

APR is expressed as a yearly rate, so to isolate one day's worth of interest you divide by the number of days in the year — that's the daily, or "actual/365," accrual method most U.S. consumer lenders use. In a leap year, 366 days spreads the same annual rate over one more day, so each individual day's interest is fractionally smaller. This calculator applies the actual number of days (365 or 366) for every calendar year the period touches. A minority of commercial and some consumer lenders instead use a 360-day year for calculations, which slightly increases the effective daily rate — check your credit agreement's accrual method if your statement doesn't match this estimate exactly.

How your billing day shapes the statement cycle

Accrued interest is charged on a recurring billing day set by your lender. If your billing day is the 25th, the first cycle runs from your draw date through the next 25th, and each following cycle covers one full month after that. Choosing "last day of month" instead ties every cycle to the calendar month's final day. Changing the billing day doesn't change your total interest by much, but it does change how much lands on each statement and when — useful for planning cash flow around due dates.

• Billing day = the date each month interest is charged to your account
• Cycle period = the day after the previous billing date through the current billing date
• Total interest stays close to the same; only the per-cycle amount and timing shift

How the amount drawn and days outstanding move your interest cost

Interest scales almost linearly with both the amount drawn and the number of days you carry it. Double the balance and interest roughly doubles; double the days outstanding and interest roughly doubles again. Carrying a large balance for a long stretch is the combination that costs the most — drawing only what you need, and paying it back as soon as you can, is the most reliable way to keep the interest line small.

APR, rate caps, and the legal backdrop

Unlike some products, there is no single federal interest-rate cap on personal lines of credit or overdraft lines — rate limits are set state by state through usury laws, and many states exempt regulated bank lenders from a hard cap entirely. One federal protection that does apply broadly is the Military Lending Act, which caps the Military Annual Percentage Rate at 36% for covered active-duty servicemembers and their dependents on most consumer credit. Outside that, published APRs on personal lines of credit from banks and credit unions typically run from roughly 10% to 18% for well-qualified borrowers, with overdraft lines and lower-credit offers often priced higher.

• No uniform federal usury cap — limits vary by state law
• Military Lending Act: 36% MAPR cap for covered servicemembers and dependents
• Typical published APR range for personal lines of credit: roughly 10%–18%
• Overdraft lines and subprime offers can carry meaningfully higher APRs

Line of credit vs. other borrowing options

A personal line of credit is revolving credit: you draw, repay, and redraw within your approved limit without reapplying, and interest applies only to what's outstanding. That sets it apart from a personal loan, which disburses a fixed lump sum with a fixed repayment schedule and interest on the full amount from day one. Compared with a credit card, a line of credit often carries a lower APR and larger available limit, but usually lacks a card's purchase rewards or 0% introductory offers. An overdraft line specifically links to a checking account to cover shortfalls automatically, trading convenience for a rate that can run higher than a standalone line of credit.

• Line of credit: revolving, draw as needed, interest on drawn balance only
• Personal loan: lump sum, fixed schedule, interest on the full amount from disbursement
• Credit card: revolving like a line of credit, but with rewards/introductory offers and often a higher standard APR
• Overdraft line: tied to checking, covers shortfalls automatically, rate often higher than a standard line of credit

Practical ways to cut what you pay in interest

Because interest is simply balance times rate times time, the fastest ways to lower it are to shrink the balance or shorten how long you carry it. Paying down any amount as soon as you have spare cash — rather than waiting for your billing day — starts saving interest immediately, since accrual is calculated daily. The most common costly mistake is drawing close to your limit and letting it sit there for months without paying it down.

• Make extra payments as soon as you can, rather than waiting for the statement date
• Draw only what you actually need, and pay off unused draws promptly
• Always pay at least the interest due to avoid it compounding into the balance
• If you expect to carry a balance long-term, compare offers for a lower-APR line or a fixed personal loan

A quick checklist before you rely on this estimate

This calculator is only as accurate as the numbers you put into it. Running through this checklist first will get your estimate much closer to your actual statement.

• Is the amount drawn your actual outstanding balance, not your full credit limit?
• Is the APR the actual rate on your account, including any promotional or penalty adjustments?
• Do the draw date and days outstanding match your real usage period?
• Does the billing day match the actual statement date on your account agreement?
• If your balance changed significantly mid-period, have you split the calculation into separate segments?