Overdraft Cost Calculator UK
Calculate the cost of using an arranged or unarranged overdraft including interest and daily fees over the days you are overdrawn.
Calculator
What this means
Overdrafts can be expensive. Banks charge interest (often EAR) and sometimes daily fees, especially for unarranged overdrafts.
How to use this calculator
- Enter your overdrawn amount.
- Enter your overdraft interest rate (EAR) and number of days.
- See the estimated cost of being overdrawn.
Worked example
You're £500 overdrawn for 20 days at 39.9% EAR.
- Interest accrues daily on the overdrawn balance.
- Roughly: £500 × 39.9% × (20 ÷ 365) ≈ £11.
Being overdrawn would cost around £11 for those 20 days.
Who this is for
- Anyone using an arranged overdraft.
- People comparing the cost with other borrowing.
- Anyone trying to cut bank charges.
How overdraft charges work
Since 2020, most banks charge a single annual interest rate (EAR) on arranged overdrafts — often around 35–40% — instead of daily fees. Interest builds up for each day you're overdrawn.
Overdrafts are an expensive way to borrow over time. For ongoing needs, a lower-rate loan or 0% card is usually cheaper, and clearing the overdraft removes the daily cost.
Frequently asked questions
EAR (Equivalent Annual Rate) shows the yearly cost of borrowing including compound interest. Check your bank's overdraft rate.
Usually yes. Unarranged overdrafts often have higher rates and daily fees than arranged limits.
Use a arranged overdraft if needed, pay off quickly, and review budget tools to avoid going overdrawn.
EAR (Effective Annual Rate) is the yearly interest rate on an arranged overdraft, excluding fees. Many banks charge around 39.9% EAR, so overdrafts are pricey for sustained borrowing.
It depends on the rates and how long you borrow. For short periods an overdraft can be fine, but for larger or longer borrowing a personal loan or 0% card is often cheaper.
Disclaimer
This calculator provides estimates for guidance only. It is not financial, legal or tax advice. Always check official sources or speak to a qualified professional before making decisions.
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