What does the Overdraft Cost Calculator do?

Calculate the interest cost of using your overdraft. Most UK banks charge ~39.9% EAR. All calculations are performed in your browser using official UK rates and thresholds.

Does this use current UK interest rates?

You can enter any interest rate to model different scenarios. The Bank of England base rate and FCA guidelines influence typical lending rates available in the UK market.

Should I get professional debt advice?

If you are struggling with debt, free professional advice is available from StepChange (0800 138 1111), Citizens Advice, and the National Debtline (0808 808 4000). This calculator provides estimates only.

Overdraft Cost Calculator

Calculate the interest cost of using your overdraft. Most UK banks charge ~39.9% EAR.

Last updated: April 2026 · Source: FCA — Overdrafts

Overdraft Amount

APR (%)

Most UK banks: ~39.9% EAR

Number of Days

Interest for 30 days

£16.40

£0.55/day · ~£16.64/month

At 39.9% APR, borrowing £500.00 for a full year costs £199.50.

Since 2020, most UK banks charge a single simple interest rate on overdrafts (typically ~39.9% EAR).

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

Since April 2020, FCA rules require UK banks to charge a single annual interest rate (EAR) on arranged overdrafts, with no daily or monthly fees. Most major banks charge between 35% and 40% EAR. This replaced the old system of daily fees plus interest that made costs difficult to compare.

Unarranged overdrafts can no longer attract higher charges than arranged overdrafts. However, banks may still refuse transactions that would take you beyond your arranged limit. If your account goes into an unarranged overdraft, you are charged the same EAR as the arranged rate.

This calculator shows the daily and monthly cost of using your overdraft at a given EAR and balance. It helps you compare whether an overdraft is cheaper or more expensive than alternatives such as a credit card or personal loan for short-term borrowing.

Example: £1,000 overdraft at 39.9% EAR

Daily equivalent rate: 39.9% ÷ 365 = approx. 0.109% per day
Cost for one month (30 days): approx. £32.70
Cost for three months: approx. £98.10
Annual cost if balance remains at £1,000: approx. £399

Source: FCA — Overdrafts

Frequently Asked Questions

What does the Overdraft Cost Calculator do?: Calculate the interest cost of using your overdraft. Most UK banks charge ~39.9% EAR. All calculations are performed in your browser using official UK rates and thresholds.
Does this use current UK interest rates?: You can enter any interest rate to model different scenarios. The Bank of England base rate and FCA guidelines influence typical lending rates available in the UK market.
Should I get professional debt advice?: If you are struggling with debt, free professional advice is available from StepChange (0800 138 1111), Citizens Advice, and the National Debtline (0808 808 4000). This calculator provides estimates only.