Line of Credit Calculator Canada (2026): Interest and Payment Estimates

This calculator estimates the interest and payments on a line of credit. In Canada, line of credit interest is calculated daily on the outstanding balance and charged to the account monthly, so the timing of each payment changes what you pay. It is one of the calculators in the personal loans and lines of credit hub.

How Interest on a Line of Credit Is Calculated

The daily interest formula is:

$$\text{Daily Interest} = \text{Outstanding Balance} \times \frac{\text{Annual Interest Rate}}{365}$$

Worked Example: Daily Interest

Because interest accrues daily, a payment made mid-month lowers that month’s interest right away.

How a Line of Credit Works

A line of credit (LOC) gives you access to money up to an approved limit. Unlike a personal loan, which pays out a lump sum, a line of credit is revolving: you can borrow, repay and borrow again as often as you need.

While a balance is outstanding you must make at least the minimum payment. On many lines of credit that is the interest owed; on others it is the greater of the interest owed or a small percentage of the balance (often 2–3%).

Line of credit rates in Canada are usually the lender’s prime rate plus a spread, so they are variable: when the Bank of Canada changes its policy rate, prime and your line of credit rate move with it. On a large balance, even a small rate change shifts the monthly interest noticeably.

Rates to Enter in the Calculator

With prime at 4.45%, a HELOC is typically prime + 0.5% to 1% and an unsecured line prime + 1.5% to 5% or more, depending on your credit score and the lender. Current spreads by lender and by credit score are on the line of credit rates page, and HELOC rates and limits on best HELOC rates in Canada.

Secured vs Unsecured Lines of Credit

A secured line of credit is backed by collateral, most often your home in the form of a home equity line of credit, which a HELOC calculator models on its own. Because the lender has security, the rate is lower and the limit higher, but the home is at risk on default. An unsecured line of credit relies only on your creditworthiness, so its rate is higher and its limit lower, with no asset at risk; secured vs unsecured loans explains the trade-off in general.

Choosing a Line of Credit or Something Else

The calculator assumes a revolving balance with interest charged daily from the day of each draw. A personal loan with fixed payments, or a credit card with a grace period on purchases paid in full, works differently: personal loan vs line of credit vs credit card compares all three with repayment tables, and the credit cards section has a separate page on line of credit vs credit card.

Managing a Line of Credit

A personal ceiling. A $30,000 limit doesn’t have to be used; keeping your own ceiling well below it leaves room for emergencies.

Payments above the minimum. When the minimum covers only interest, the balance never falls; only payments above it reduce the principal.

A repayment plan for each draw. Deciding in advance how many months a draw will take to repay, and paying on that schedule, makes a line behave like a loan.

Watching prime. Since the rate is variable, prime rate changes flow straight into the interest. A sustained rise is the point at which some borrowers pay the balance down faster or move it to a fixed-rate personal loan.

Daily expenses. A line of credit that is covering everyday living costs is usually a sign the budget needs a look rather than more credit.

Credit utilization. Using a high share of your available credit can lower your credit score; many borrowers keep utilization below about 30% of the limit.

To plan repayment across several debts at once, the debt payoff calculator compares payoff orders, and how loan interest is calculated explains compounding and amortization.