Overdraft Interest Calculator
An overdraft or cash-credit facility lets you draw money up to a sanctioned limit and pay interest only on what you use, for the days you use it. This overdraft interest calculator applies the day-count formula banks follow, so you can see the exact cost of dipping into your limit. Enter the amount drawn, the annual rate and the number of days to find the interest, and see how repaying early lowers it.
Interest Payable
₹1,973
Total Repayable
₹2,01,973
About the Overdraft Interest Calculator
An overdraft is a credit facility that lets you withdraw more than your account balance, up to a pre-approved limit. Unlike a term loan, there is no fixed EMI: interest is charged only on the amount you actually draw and only for the days it stays outstanding.
Why it is useful
For short, irregular cash gaps, an overdraft can be far cheaper than a personal loan because you are not paying interest on a lump sum you do not need. Seeing the day-wise interest helps you decide when to draw, how much, and how quickly to repay to keep the cost down.
How the calculation works
Interest is calculated as Interest = Amount × Rate × Days ÷ 365, applied only to the drawn amount and only for the number of days it is outstanding. Because it is proportional to days, repaying early reduces the interest directly. An overdraft is usually cheaper than a personal loan for short needs, while a term loan is cheaper for a large fixed requirement over a long period.
Key inputs explained
- Amount drawn: The portion of your sanctioned limit you actually use, on which interest applies.
- Interest rate: The annual rate on the facility, often linked to your relationship or collateral.
- Days outstanding: The number of days the drawn amount stays unpaid, counted on a 365-day basis.
Example calculation
Inputs
- Amount drawn
- ₹2,00,000
- Interest rate
- 12% p.a.
- Days outstanding
- 45 days
Calculation breakdown
- Annual interest
- 2,00,000 × 12% = ₹24,000
- Day fraction
- 45 ÷ 365 ≈ 0.1233
- Interest
- 24,000 × 0.1233
Using the limit for 45 days costs about ₹2,959, far less than the interest on a personal loan of the same size held for a year. Repaying after 20 days instead would cut the interest to roughly ₹1,315, since it is charged strictly by the day.
Benefits
- Pay interest only on the amount and days you actually use.
- Cheaper than a personal loan for short, irregular cash needs.
- See instantly how repaying early lowers your interest.
Limitations
- Rates are often higher than secured term loans for long-term use.
- Excludes annual renewal, processing and non-utilisation charges.
- Assumes a single draw; multiple draws need day-wise tracking.
Tips
- Repay drawn amounts as soon as funds arrive to minimise interest.
- Use an overdraft for short gaps and a term loan for large, long needs.
- Check whether interest is charged on a 365 or 360-day basis.
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About this calculator
The Overdraft Interest Calculator is built and maintained by the PaisaBot team. All calculations run instantly in your browser using established financial formulas, and we use high-precision arithmetic to keep the results reliable.
Data accuracy: Interest rates, tax slabs, and scheme rules are updated periodically, but figures can change with RBI, government, and lender revisions. Always confirm the latest rates with your bank or an official source before acting.
Educational purpose: This tool is provided for general information and financial education only. It does not constitute investment, tax, or legal advice. For decisions specific to your situation, please consult a qualified financial advisor.