Line of Credit Interest Calculator

How it is calculated

The tool uses simple daily interest on a balance that stays the same for the whole period: daily interest = balance × annual rate ÷ 100 ÷ 365, then interest = daily interest × days, and total due = balance + interest. Balance is the amount drawn, in dollars, not the credit limit; the annual rate is a percent per year (11.5 means 11.5%); days is the number of days the balance stays outstanding. A 365-day year is used, with no leap-year or 360-day option. Interest is not compounded, and the tool adds no fees or minimum payments. All three fields are required and none may be negative, otherwise no result appears. Zero days gives zero interest but still shows the daily figure. If your balance changes during the month, run the tool once for each stretch of days at each balance and add the results.

Common mistakes

• Entering the credit limit as the balance. Interest is charged only on the amount actually drawn, so use the drawn balance.
• Entering the rate as a decimal (0.115) instead of a percent (11.5). The interest would be about one hundredth of the right amount.
• Entering a monthly rate in the annual-rate box. The tool divides by 365 as if the rate were per year.
• Using one balance for a month in which you drew or repaid funds. Split the month into periods with a constant balance and add the interest for each.
• Comparing the result to a statement that uses a 360-day year or compounds daily. Small differences in cents are normal because this tool uses 365 days and simple interest.