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Quick answer
What does the Line of credit cost calculate?
What does a drawn credit line cost over the chosen number of days? This calculator uses amount drawn, annual interest rate, days outstanding, and draw or service fee to estimate short-term credit-line cost immediately in your browser.
With the values currently entered, the result is $331.23 — estimated borrowing cost. It also shows interest, and effective cost over period.
How to use the Line of credit cost
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Amount drawn
- Annual interest rate — entered in %
- Days outstanding — entered in days
- Draw or service fee
Line of credit cost formula
Amount drawn × APR × days ÷ 365 + fees
Assumptions
- Simple daily interest is used.
- Payments and compounding during the period are excluded.
Verify the inputs
Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Line of credit cost example and edge cases
What does a drawn credit line cost over the chosen number of days? Let's use a concrete example, then look at the assumptions that can move the answer.
Example: A practical line of credit cost scenario
For this example, use amount drawn of 12,000, annual interest rate of 11 %, days outstanding of 75 days, and draw or service fee of 60. These are starting values, so replace them with numbers that match your situation.
- Amount drawn
- 12,000
- Annual interest rate
- 11 %
- Days outstanding
- 75 days
- Draw or service fee
- 60
Calculated result$331.23estimated borrowing cost
Start with estimated borrowing cost. Then check interest, and effective cost over period to understand what sits behind the main result.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the main result first. The supporting figures for interest, and effective cost over period explain how the estimate is built.
- The method is Amount drawn × APR × days ÷ 365 + fees. Keep the units consistent and use values from the same time period.
Edge cases worth checking
When amount drawn is unusual
Simple daily interest is used. Double-check this input before relying on the result.
When draw or service fee is uncertain
Payments and compounding during the period are excluded. Run a lower and higher value to see a useful range.
What changes the result most
Amount drawn
Use a current amount for amount drawn. Include fees or recurring costs that belong in the same figure.
Annual interest rate
Test a lower and higher annual interest rate. A small percentage change can move the final result more than expected.
Days outstanding
Keep days outstanding on the same time basis as the other inputs. Monthly and annual values are easy to mix up.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Amount drawn: 10% lower
10,800$304.11estimated borrowing cost
Amount drawn: 10% higher
13,200$358.36estimated borrowing cost
Annual interest rate: 10% higher
12 %$355.89estimated borrowing cost
Common mistakes
Check amount drawn
Simple daily interest is used. Make sure this matches the number you enter.
Keep draw or service fee consistent
Payments and compounding during the period are excluded. Use the same units and time period throughout the calculation.
Do not rely on one line of credit cost scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
What does a drawn credit line cost over the chosen number of days?
A lender’s APR, fees, eligibility rules, and contract control the real offer.