Tools/Overdraft Interest Rate Calculator & Charges
Overdraft Interest Rate Calculator & Charges
See exactly what your overdraft costs - interest on the utilised amount plus the charges that quietly add up.
Utilisation Details
Total interest for 90 days
₹1,47,945
Effective monthly cost
₹49,315
Calculated at 12% p.a. on ₹50 Lakh
125+ lenders. Termsheet in 48h. Zero equity dilution.
How overdraft interest and charges work
An overdraft charges interest only on the amount you draw, calculated daily and debited monthly. If your limit is ₹50 lakh but you use ₹20 lakh, interest applies on ₹20 lakh alone - that flexibility is the whole point of an OD.
The catch is the charges around the interest: processing fees (0.5-2% of the limit), annual renewal fees, and commitment charges on unused limits with some lenders. A dropline OD adds another wrinkle - the limit reduces every month, so your usable headroom shrinks on a schedule.
Explore Dropline OverdraftWhat is an overdraft interest rate calculator?
This calculator shows the monthly and annual interest cost of an overdraft based on the amount you actually utilise and your rate. Overdraft rates for businesses in India typically run 10-16% p.a. against collateral or fixed deposits, and 14-20% unsecured.
How to use this calculator
- 1
Set the amount you typically keep drawn from the OD - not the sanctioned limit.
- 2
Set the interest rate your lender charges - check your sanction letter for the exact spread.
- 3
Read the monthly and annual interest cost of running the facility at that utilisation.
- 4
Add your processing and renewal fees mentally - they often add 1-2% to the true annual cost.
Regular OD vs dropline OD
Regular overdraft
Limit stays constant and renews annually. Best for fluctuating working capital needs.
Dropline overdraft
Limit reduces monthly over the tenure - like a term loan and OD hybrid. Usually no annual renewal, and often available against property.
Watch commitment charges
Some lenders charge 0.25-0.5% on the unused portion of the limit - sizing the limit right saves real money.
Interest is only part of the cost
Processing, renewal, and documentation charges can add 1-2% annually - always compare the all-in cost.