Result
Difference (overdraft minus loan)
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Cost for each option = amount × rate ÷ 100 × days ÷ 365 — simple interest for the actual days the money is used. Difference = overdraft cost − loan cost: a positive number means the overdraft costs more.
Overdraft rates are usually higher than ordinary loan rates, but an overdraft has no fixed repayment schedule — you can use the money for exactly as many days as needed, without taking out a loan for a preset term. Over very short periods, that flexibility can outweigh the higher rate.
The calculation uses simple interest for both options, not an annuity loan schedule with a fixed monthly payment — this is an honest comparison of the cost of using the money for a specific number of days, not a full loan schedule with equal payments.