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Page written by Ian Hawkins. Last reviewed on March 9, 2026. Next review due January 1, 2027.
This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.
To calculate your line of credit, use the following steps as a guideline:
Determine the interest rate: Find out the annual interest rate (APR) that applies to your line of credit.
Find the credit limit: Determine the maximum amount you can borrow from the line of credit.
Calculate interest: Multiply the outstanding balance of your line of credit by the daily interest rate (APR divided by 365).
Determine minimum payments: Many lines of credit require minimum monthly payments. This could be a percentage of the outstanding balance or a fixed amount.
Track spending: Keep track of your spending and borrowing against the line of credit to ensure you stay within the credit limit and can manage repayments effectively.
Monitor interest accrual: As you borrow from and repay the line of credit, keep an eye on the interest that accrues to understand your total borrowing costs.
By following these steps, you can effectively calculate and manage your line of credit to ensure you borrow responsibly and meet your repayment obligations. If you are a business or SME, sure to review the business line of credit requirements before officially starting the process.
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