Utilized Overdraft Balance
₹ 5,00,000
Daily Interest Amount
₹ 164
Utilization Duration
30 Days
Total Interest Payable
₹ 4,932
About the Overdraft Interest Calculator
Our free Overdraft Interest Calculator helps business owners and individuals compute the exact interest charges accrued on bank overdraft facilities. Unlike standard term loans where interest applies to the entire sanctioned amount, overdraft interest is charged exclusively on the daily utilized balance.
How Overdraft Interest Is Calculated
Banks calculate overdraft interest on a daily compounding or simple daily accrual basis depending on the agreement. The core formula used is:
$$\text{Daily Interest} = \frac{\text{Utilized Amount} \times \text{Interest Rate (\% p.a.)}}{365}$$
$$\text{Total Interest} = \text{Daily Interest} \times \text{Number of Utilization Days}$$
How to Use the Calculator
Simply enter your facility parameters or adjust the interactive range sliders:
- Total Overdraft Limit: The maximum credit limit sanctioned by your bank.
- Utilized Overdraft Amount: The actual amount borrowed or withdrawn from the facility.
- Interest Rate & Days: The annual percentage rate charged by the bank and the number of days the funds remain utilized.
Click the Calculate Interest button or modify inputs to instantly view your utilized balance, daily interest accrual, and total interest payable.
Frequently Asked Questions (FAQs)
Is interest charged on the total OD limit or the utilized amount?
Interest is charged strictly on the utilized amount (the actual funds withdrawn), not on the total sanctioned overdraft limit.
How frequently is overdraft interest debited by banks?
Most banks calculate interest on a daily basis and debit the accumulated interest charges from your account at the end of each calendar month.
Are there any extra fees associated with bank overdrafts?
Yes, banks often charge annual facility renewal fees, processing charges, or commitment fees on unutilized limits depending on your corporate or individual banking agreement.
