Overdraft Calculator
Find out exactly what your overdraft is costing you. Factor in the amount you’re overdrawn, your interest rate (EAR), any interest-free buffer, and the number of days overdrawn.
Calculate Your Overdraft Cost
Enter your overdraft details below. The calculator will break down the chargeable amount and interest to show what your overdraft is likely to cost you.
Overdraft Interest Solver
Estimate the interest cost of your current overdraft balance
Overdraft Quick Facts
Essential insights into UK overdraft charges
Understanding Overdraft Interest
Overdraft interest is rarely a single flat fee. Here’s how the calculation typically works.
Check Your Buffer
If your account offers an interest-free buffer, interest is only charged on the amount overdrawn beyond that threshold.
Apply the Daily Rate
Your annual interest rate (EAR) is converted into a daily rate, which is applied to your chargeable overdrawn balance each day.
Total Up the Days
The daily interest amount is multiplied by the number of days you remain overdrawn during the statement period.
Add It to Your Balance
The total interest is usually added to your overdraft balance, increasing the amount you’ll need to repay.
Typical Overdraft Rates
Illustrative examples of how overdraft interest rates and buffers can vary between account types.
| Account Type | Typical EAR | Interest-Free Buffer | Notes |
|---|---|---|---|
| Standard Current Account | 35% – 40% | £0 – £20 | Most common structure across UK banks |
| Student Account | 0% | Up to £1,500 – £3,000 | Often 0% within agreed limit during studies |
| Packaged / Premium Account | 20% – 35% | £0 – £50 | May include a lower rate as a account perk |
| Unarranged Overdraft | Up to 40% | None | Can include additional fees on some accounts |
Overdraft FAQ
Answers to the most frequently asked questions about overdrafts and how they’re charged.
Most UK overdrafts charge interest daily, based on your Effective Annual Rate (EAR) divided by 365 and applied to the amount you’re overdrawn by each day, then totalled up over your statement period.
Some current accounts offer a small interest-free buffer, meaning you won’t be charged interest until your overdraft balance goes beyond that amount. Not all accounts offer this, so it’s worth checking your terms.
An arranged overdraft is a limit agreed with your bank in advance, usually at a set interest rate. An unarranged overdraft happens when you spend beyond your agreed limit or without one in place, and can sometimes come with additional fees.
Regularly relying on your overdraft, especially close to or beyond your limit, can be seen by lenders as a sign of financial strain and may influence your credit score, even if you make all your payments on time.