# What will my line of credit cost?

Works out the monthly payment on a line of credit balance: interest-only in the draw period, then level payments over the repayment term, or how long a fixed payment takes to clear it, with the total interest.

- Page: https://www.acalculator.org/finance/line-of-credit-calculator
- JSON spec: https://www.acalculator.org/finance/line-of-credit-calculator.json
- Version: 65f66f9a35ee

## Default answer

Example with the default inputs (Amount drawn $20,000.00, Interest rate (APR) 9%, Repay by Draw, then term, Interest-only months 12, Repayment months 60): Your line of credit payment is $415.17 a month, with $6,710.03 of interest in all.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| amount | Amount drawn | The balance you owe on the line of credit. |
| apr | Interest rate (APR) | The yearly rate on the line. Interest each month is the APR ÷ 12 on the balance. |
| plan | Repay by | Level payments over a repayment term after a draw period, or a fixed payment you choose. |
| draw | Interest-only months | Months of the draw period left, when you pay only the interest. 0 to start repaying now. |
| term | Repayment months | The months of the repayment period, when the balance is paid off in level payments. |
| pay | Monthly payment | The amount you pay each month until the balance is gone. It must be more than the first month’s interest. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| monthly | Monthly payment | The level payment in the repayment period, or the fixed payment you chose. |
| interestOnly | Interest-only payment | The payment in the draw period: amount × APR ÷ 12. |
| months | Months to pay off | The number of payments until the balance is 0, draw period included. |
| interest | Total interest | All the interest paid until the balance is 0. |
| total | Total paid | The amount drawn plus the total interest. |
| amount | Amount drawn | The balance at the start. |

## Method

r = APR ÷ 12; draw months pay B × r; then the level payment B × r ÷ (1 − (1 + r)^−term) (B ÷ term at 0%); a fixed payment P clears the balance in −ln(1 − rB/P) ÷ ln(1 + r) months.

## Assumptions

- Interest each month is the APR ÷ 12 on the balance. Lenders that charge a daily rate on the daily balance give slightly different amounts.
- You draw nothing more after today, and the rate stays the same. Many lines of credit have variable rates.
- Payments are made at the end of each month; the last payment clears what is left. Fees are not included.

## Worked examples

1. amount = $12,000.00, apr = 0%, plan = term, draw = 0, term = 12 gives monthly = $1,000.00, interest = $0.00, months = 12. Source: Consumer Financial Protection Bureau, What is a home equity line of credit (HELOC)? (you can borrow up to the limit during the draw period; then the repayment period starts, the lender sets a schedule to repay the full balance, and payments often go up), https://www.consumerfinance.gov/ask-cfpb/what-is-a-home-equity-line-of-credit-heloc-en-107/ (retrieved 2026-10-02).
2. amount = $20,000.00, apr = 9%, plan = term, draw = 12, term = 60 gives interestOnly = $150.00, monthly = $415.17, months = 72, interest = $6,710.03. Source: Consumer Financial Protection Bureau, What is a home equity line of credit (HELOC)? (you can borrow up to the limit during the draw period; then the repayment period starts, the lender sets a schedule to repay the full balance, and payments often go up), https://www.consumerfinance.gov/ask-cfpb/what-is-a-home-equity-line-of-credit-heloc-en-107/ (retrieved 2026-10-02); Consumer Financial Protection Bureau, Regulation Z, 12 CFR 1026.7 Periodic statement (the statement discloses each periodic rate that may be used to compute the finance charge), https://www.consumerfinance.gov/rules-policy/regulations/1026/7/ (retrieved 2026-10-02).
3. amount = $10,000.00, apr = 12%, plan = payment, pay = $500.00 gives months = 23, interest = $1,213.48. Source: Consumer Financial Protection Bureau, Regulation Z, 12 CFR 1026.7 Periodic statement (the statement discloses each periodic rate that may be used to compute the finance charge), https://www.consumerfinance.gov/rules-policy/regulations/1026/7/ (retrieved 2026-10-02).

## FAQ

### How is the interest on a line of credit worked out?

Each month the interest is the balance times the APR ÷ 12. On $20,000 at 9%, that is 20,000 × 0.09 ÷ 12 = $150 a month. Many lenders use a daily rate on the daily balance instead, which gives slightly different amounts.

### What is an interest-only payment?

During the draw period many lines let you pay only the interest, so the balance does not fall. On $20,000 at 9% it is $150 a month, and after a year you still owe $20,000. Check your agreement for the minimum payment your lender asks for.

### What happens when the draw period ends?

The repayment period starts: you can no longer borrow, and the balance is paid off in level payments that include principal. $20,000 at 9% over 60 months is about $415.17 a month, much more than the $150 interest-only payment.

### How long will a fixed payment take to pay off my line of credit?

With balance B, monthly rate r and payment P, the months are −ln(1 − rB ÷ P) ÷ ln(1 + r). $10,000 at 12% paid at $500 a month takes 22.4 months, so 23 payments, with about $1,213 of interest. A payment at or below the first month’s interest never clears the balance.

### How does a line of credit differ from a loan?

A loan pays out once and is repaid on a fixed schedule. A line of credit lets you borrow up to a limit, repay and borrow again during the draw period, and often has a variable rate. This calculator looks at the balance you owe now, as if you draw nothing more.

## Sources

- Consumer Financial Protection Bureau, What is a home equity line of credit (HELOC)? (the draw period, the repayment period, and payments that often go up when repayment starts). https://www.consumerfinance.gov/ask-cfpb/what-is-a-home-equity-line-of-credit-heloc-en-107/ (retrieved 2026-10-02)
- Consumer Financial Protection Bureau, Regulation Z, 12 CFR 1026.7 Periodic statement (each periodic rate used to compute the finance charge on open-end credit). https://www.consumerfinance.gov/rules-policy/regulations/1026/7/ (retrieved 2026-10-02)