Find out exactly what your overdraft is costing per day, per month, and per year. Model how regular deposits reduce the balance and see when you become overdraft-free given your income and spending pattern.
Country
Currency
💸
Overdraft Interest Calculator
Overdraft Type
Section 1: Your Overdraft
$
The amount you are currently overdrawn. Enter as a positive number.
%
Annual percentage rate charged on the overdraft balance. Check your bank statement or agreement.
$
Your approved overdraft limit. Used to show headroom and warn if balance exceeds limit.
$
Fixed daily charge for unarranged overdraft (some banks charge this in addition to interest).
$
Maximum total charge per month if your bank applies a cap. Enter 0 for no cap.
Section 2: Monthly Income & Spending
$
Net monthly income deposited into this account. Used to model how the overdraft reduces over time.
$
Total monthly outgoings charged to this account. Must be less than income to clear the overdraft.
mo.
How many months to project even if the overdraft is not cleared.
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Calculating...
Annual Overdraft Cost
—
at current balance, full year
Daily Interest Cost
—
per day at current balance
Monthly Interest Cost
—
30-day estimate
Effective Daily Rate
—
APR converted to daily
Months to Clear Overdraft
—
at net income surplus
Total Interest to Payoff
—
if cleared on current trajectory
Monthly Fee (if unarranged)
—
fixed daily fees x 30
Total Overdraft Cost (incl. fees)
—
interest + all fees to payoff
Full Calculation Breakdown
Overdraft balance—
Overdraft APR—
Daily rate (APR / 365)—
Daily interest charge—
30-day interest charge—
Annual interest (if balance unchanged)—
Daily unarranged fee—
Monthly unarranged fee (capped)—
Total daily cost (interest + fee)—
Monthly net income surplus—
Effective monthly reduction—
Months to clear overdraft—
Total interest to clear—
Total fees to clear—
Month-by-Month Overdraft Projection
Overdraft Balance Over Time
Overdraft balance
Cumulative interest
✦ Cal, AI Explanation
Cal is reviewing your overdraft...
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Cal
Your overdraft cost is calculated. Ask me how to clear it faster, whether a 0% balance transfer makes sense, or how the daily rate compares to other forms of borrowing.
💸 Overdraft facts
Overdraft interest accrues daily, not monthly, making the true rate feel invisible until it accumulates
A 40% APR overdraft costs roughly 0.11% per day on the outstanding balance
In the UK, overdraft rates were capped at 39.9% APR by the FCA in 2020, replacing fixed daily fees
A balance transfer to a 0% card is often the cheapest way to clear an overdraft with a defined payoff date
Even a small income surplus applied consistently each month will clear most overdrafts within a few months
Unlike a loan, overdraft interest accrues on a daily basis. Your bank calculates interest each day on whatever negative balance is outstanding, then adds it to the account. Because the balance changes every time money enters or leaves the account, the daily charge fluctuates constantly. This calculator models a simplified but accurate version using a consistent daily rate derived from the annual APR.
Compounding is applied monthly in the simulation. Some banks compound daily, which increases the effective rate slightly above the APR.
How the payoff simulation works
The simulation runs month by month. Each month, interest is added to the outstanding overdraft balance. Then the net income surplus (income minus spending) is applied, reducing the balance. If the surplus exceeds the balance plus interest, the overdraft clears in that month. The simulation continues for the selected period even if the overdraft is cleared, showing the month of clearance.
Important: if monthly spending equals or exceeds income, the overdraft never clears and interest compounds indefinitely. The calculator flags this explicitly and shows the growing balance over time.
Balance
APR
Daily cost
Monthly cost
Annual cost
$100
39.9%
$0.11
$3.33
$39.90
$500
39.9%
$0.55
$16.63
$199.50
$1,000
39.9%
$1.09
$33.25
$399.00
$2,500
39.9%
$2.74
$83.13
$997.50
$500
19.9%
$0.27
$8.29
$99.50
Frequently Asked Questions
How is overdraft interest different from loan interest?+
Overdraft interest accrues daily on a revolving balance that changes with every transaction. Loan interest accrues on a fixed scheduled balance and is repaid through a structured monthly payment. Overdrafts are therefore harder to track and often feel less urgent because there is no required monthly payment. The APR on overdrafts is typically much higher than on personal loans, and because the balance can stay static for months if spending matches income, the total cost can be surprisingly large for what feels like a small, temporary shortfall.
What is the difference between arranged and unarranged overdrafts?+
An arranged overdraft is one your bank has agreed to in advance up to a set limit. You pay the agreed APR on the outstanding balance. An unarranged overdraft occurs when your balance goes below zero without pre-approval, or exceeds your arranged limit. Unarranged overdrafts typically carry a higher interest rate and may include additional daily charges, though in many countries regulators now cap what banks can charge. In the UK since 2020, unarranged and arranged overdrafts must be priced using a single APR with no separate fixed fees allowed.
What is the fastest way to clear an overdraft?+
The most effective method is to direct your entire monthly income surplus (income minus essential spending) toward the overdraft rather than allowing it to sit as a positive balance. Because interest accrues daily, every day spent out of overdraft saves money. Some people find it helpful to make a one-off extra payment using savings, treating the overdraft APR as the return on that money (at 40% APR, using savings to clear it is equivalent to earning 40% guaranteed). A balance transfer to a 0% credit card can also clear the overdraft immediately, converting a high-rate revolving debt into a fixed 0% schedule.
Does overdraft interest compound?+
Yes. Most banks add interest to the account balance monthly or daily, which means interest itself starts accruing interest. This calculator uses monthly compounding, which is the most common practice. Banks that compound daily will charge slightly more than the stated APR implies, because the effective annual rate (EAR) on daily compounding is marginally above the APR. For most overdraft balances, the difference between daily and monthly compounding is small, but on large balances held for long periods it adds up.
When does it make sense to use a personal loan to clear an overdraft?+
If your overdraft APR is significantly higher than the rate available on a personal loan, taking the loan and using it to clear the overdraft immediately saves money. The key advantage is converting an unstructured revolving debt into a structured amortising loan with a defined payoff date. The risk is that after clearing the overdraft with a loan, some people accumulate the overdraft again, ending up with both the loan and a new overdraft balance. The solution is to reduce or cancel the overdraft facility after clearing it.
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