Revolving Line of Credit Calculator
Model payment scenarios, compare APR paths, and export detailed reports
Line Setup
Index Schedule
| Date | Index (%) | Action |
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Payment Policy
Fees
Timeline Events
Events
| Date | Type | Amount | Action |
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Custom Scenario
Balance Over Time
Payment Composition (Per Cycle)
Cumulative Interest
Scenario Comparison
| Scenario | Total Interest | Peak Payment | Total Fees | Months to Zero | Negative Amortization? |
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Cycle Statements
Daily Ledger
| Date | Start Balance | Draws | Repayments | Interest | Fees | Payment | End Balance |
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Calculation Tests
Export Options
JSON Import/Export
Revolving Line of Credit (LOC) Calculator – Expert Guide to Payments, Costs and Smart Repayment
A revolving line of credit can be a helpful safety net. It is flexible, fast, and reusable. Used well, it smooths cash flow and keeps interest costs in check. This guide explains how payments work, how our calculator models real timelines, and how to explore “what-if” scenarios that match real life. The goal is simple. Learn the rules, run your numbers, and choose a plan that fits your budget.
What Is a Revolving Line of Credit? (Simple Definition and How It Works)
A line of credit is a limit you can draw, repay, and draw again. You pay interest only on the balance you use. When you repay, your available credit resets. That is why it is called revolving credit. The Federal Reserve groups this type of borrowing under “revolving consumer credit” in its G.19 release.
Revolving vs. Non-Revolving Credit
Revolving credit keeps the door open as long as the account stays in good standing. A non-revolving loan ends once you repay it. Loans follow a fixed schedule with equal payments. A revolving line allows flexible draws and irregular payments within policy rules.
Why it matters for payments: loans amortize by design, while lines require you to manage principal. That is why minimums feel small at first. Without extra principal, your payoff can drift.
Secured vs. Unsecured LOC
A secure line uses collateral, like a home or investments. Rates tend to be lower due to lower risk. An unsecured line relies on credit history and income. Rates are higher, and limits are often smaller. Personal LOCs and business LOCs can be either type. A HELOC is collateralized by home equity. A securities-backed line ties to a brokerage portfolio.
When to consider each: Secure a lower rate with assets you can pledge. Choose unsecured if you prefer to keep assets off the table and can handle a higher rate.
How Interest Accrues on a LOC
Most lenders compute interest each day. They use a daily rate built from the APR. Many products also use average daily balance for the cycle. The Consumer Financial Protection Bureau explains that average daily balance adds each day’s balance and then divides by days in the cycle. That method aligns with what many revolving products use in practice.
Quick formula:
Daily rate = APR ÷ 365 (or 360, depending on the contract).
Daily interest = prior day balance × daily rate.
Minimum Payment Policies
Minimums vary by lender. Common policies include interest-only, a percent of the statement balance with a dollar floor, or interest plus a fixed principal floor. These rules affect payoff time. A low percent leads to slow progress on principal. An interest-only policy keeps the balance flat unless you add extra principal.
Variable Rates 101
Many lines price off an index plus a margin. Prime is a common index for US consumer credit. When the index rises, your rate and minimum can rise with it. Lenders may apply caps or floors. Some reprice daily. Others reprice monthly on a set date.
How Revolving LOC Payments Actually Work?
From APR to Daily Periodic Rate
Convert APR to a daily rate. For a 12 percent APR and a 365-day base, the daily rate is 0.12 ÷ 365. That equals 0.0003288. On a 10,000 balance, day-one interest is about 3.29. The next day uses the new balance. Small changes add up over a cycle.
Why Balances Change Daily?
Draws raise the balance on the date they post. Repayments lower it. Fees may add on draw days or month end. If you draw early in the cycle, you carry that amount for more days. That increases average daily balance and interest. If you pay mid-cycle, you cut the balance sooner and reduce interest.
Minimum vs. Accelerated Payments
Minimums keep the account current. They may not reduce principal much. Add extra principal and you shorten the payoff. Even small extra payments help. The effect compounds across months because you carry a lower balance each day.
How to Use Our Revolving LOC Calculator (Step-by-Step)
This calculator models real daily accrual and your exact event dates.
Inputs You Control
- Credit limit and starting balance. Set your line size and current draw.
- Draw and repayment events. Add dates and amounts for each expected movement.
- Rate model. Use index plus margin or enter a manual rate schedule.
- Fees. Annual, per-draw, inactivity, monthly maintenance.
- Payment policy. Interest-only, percent of statement balance with a floor, or interest plus a principal floor.
- Accrual mode and base days. Daily accrual or average daily balance. Choose 365 or 360 as your contract requires.
- Statement cycle. Pick the cycle length or end date.
Use this section when you need a line of credit payment calculator that supports multiple draws and variable rates. Use clear, dated events to match real-world timing.
What You Will See in Results
- Next payment due. Based on your policy and cycle.
- Interest and fees this cycle. Itemized and easy to scan.
- Projected payoff date. Under your chosen policy.
- Utilization and effective APR. Snapshot of credit use and cost.
- Tables and charts. Balance overtime, interest versus principal, and payment mix.
- Exports. Download CSV, XLSX, or PDF to keep records.
Quick Start Examples
- Example A. One draw, interest-only. Enter a 5,000 draw on the first day and no extra payments. See how the balance and interest behave.
- Example B. Staggered draws with a percent minimum. Add three draws across the month. Set a two percent minimum with a dollar floor. Watch the principal trend.
- Example C. Same as B plus extra principal. Add a monthly extra 50. Compare the payoff date and total interest. The difference is clear.
Calculator Methodology and Assumptions (Full Transparency)
We model days, not just months. Every input traces to a calculation you can explain.
Core Formulas
- Daily interest. Balance × daily rate, summed for the cycle.
- Average daily balance. Sum of daily balances divided by cycle days when ADB is selected.
- Posting order. Fees, then interest, then principal.
- Statement balance. Starting balance plus draws minus repayments plus fees and cycle interest before payment.
- Minimum calculation. Based on your policy and floor rules.
- Utilization. Ending balance divided by credit limit.
A formula sheet is available for download from the tool. Keep it for reference when you compare lender quotes.
Variable-Rate Handling
Choose index plus margin or enter a manual schedule. The engine can reprice daily or on fixed cycle dates. You can set temporary promotional rates, caps, or floors. The result shows how rate paths change payments and interest.
Payment Policy Logic
- Interest-only. Minimum equals the cycle interest.
- Percent of balance. A percent of statement balance with a dollar floor.
- Interest plus principal floor. Interest plus a fixed dollar principal amount.
- Weekly installment option. Split the required cycle amount into four equal weekly payments. The model applies them during the cycle.
Limitations and Edge Cases
Unusual calendars can shift totals slightly. Leap years change the daily base if your contract allows 366. Some lenders have grace rules that differ. If your line capitalizes unpaid interest, negative amortization can occur. The tool flags that state so you can adjust.
Scenario Explorer: “What-If” Comparisons
Use scenarios to plan for change. Small tweaks can reveal big effects.
Rising Prime vs. Stable Prime
Compare a stable index to a rising path. Watch minimums move and total interest rise. You will see the impact clearly over 12 months.
Extra Principal vs. Minimum Only
Add a small fixed principal amount to the baseline. The payoff pulls forward. Total interest drops. The charts quantify the savings.
Draw Timing
Move a draw from day two to day twenty-five. Interest for that cycle falls because the average daily balance is lower. Timing matters when cash flow is tight.
Fees Sensitivity
Toggle annual fees, per-draw fees, and inactivity fees. A waterfall view helps you see the true cost beyond interest.
Personal LOC Use Case (Cash-Flow Fit)
Individuals
A personal line can cover emergencies or planned expenses. It can also consolidate higher-rate debts. Keep utilization in check. Many scoring models view high utilization as a risk signal. A personal line of credit payment calculator helps you test safe draw sizes before you borrow.
LOC vs. Other Borrowing Tools (Know the Differences)
LOC vs. Amortized Personal Loan
Loans use fixed payments and end on a set date. A line is flexible. You pay interest only on the balance you use. If you want predictability, a loan can be better. If you want access and control, a line can fit. Government data classifies loans as non-revolving and lines as revolving for a reason. The structures differ.
LOC vs. HELOC
A HELOC is collateralized by home equity. Rates are often lower due to lower risk. HELOC tools focus on draw periods, repayment periods, and rate adjustments tied to housing terms. Our tool focuses on general revolving math with optional index paths. That keeps the guidance broad without collateral-specific rules.
LOC vs. Credit Cards
Cards are a type of revolving credit with set terms, grace periods, and common use of average daily balance. The CFPB explains daily and ADB interest methods in plain language. Those rules inform how we calculate interest for revolving accounts in general.
Strategies to Pay Off a Line of Credit Faster
Small habits add up. Pick one and stick with it.
Automate Round-Ups or Biweekly Payments
Automate a small extra amount. Two smaller payments can lower average daily balance more than one larger payment at month end.
Time Your Draws to Reduce Average Daily Balance
Delay non-urgent draws until later in the cycle. You carry the extra balance for fewer days, so interest falls.
Apply Windfalls to Principal
Bonuses and tax refunds can pull your payoff forward. Re-run the calculator to see the savings.
Negotiate Margins and Fees
Ask your lender about margin reductions or fee waivers. If the prime index moves lower, you may qualify for a better rate at renewal.
Avoid High Utilization
Staying far from the limit leaves room for surprises. It can also protect your credit profile.
FAQs
Glossary of Key Terms
APR. Annual percentage rate, the yearly cost of borrowing.
Periodic rate. The rate used per day or per month.
Daily interest. Balance times daily rate.
ADB. Average daily balance for the cycle.
Draw. Money taken from the line.
Statement cycle. The billing period.
Utilization. Balance divided by limit.
Index. A base rate like prime.
Margin. The add-on above the index.
Rate cap or floor. Limits on how the APR can change.
Negative amortization. When the payment fails to cover interest and fees.
Interest-only. A policy where the minimum equals the cycle interest.
Principal. The amount that reduces balance.
Minimum payment. The smallest amount due each cycle.
Visuals and Downloads
Use visuals to make tradeoffs clear.
- Charts. Balance over time, payment mix, and interest path under different rate scenarios.
- Tables. Monthly schedule with dates and amounts, fee impact summary.
- Download center. Formula sheet in PDF and your schedule in CSV or XLSX for recordkeeping.
How Our Calculator Improves on Others
- Models multiple draws and repayments on exact dates.
- Handles variable rates with index plus margin or manual paths.
- Includes full fee modeling for real monthly costs.
- Compares scenarios side by side.
- Shows transparent math and lets you export results.
You get a revolving line of credit calculator that reflects how payments and interest actually work. It is designed for real cash flow, not just a single snapshot.
Compliance, Disclaimers and Accessibility
This page is educational. It does not replace advice from a licensed advisor or lender. Results depend on your entries and your contract terms. The tool runs in your browser and does not collect personal data. We follow accessible design so more people can use the calculator with ease.
Run your numbers now. Save the setup. Export your plan and revisit it each month. If rates change, update the index and compare scenarios. Small adjustments today can reduce interest and speed up your payoff.