Singapore Overdraft Interest Cost Calculator 2026 — Daily Interest Using Actual Days/365, Minimum Payment Trap Simulator, Overdraft vs Term Loan Comparison & DBS OCBC UOB CashLine Revolving Credit True Cost

Singapore banks calculate overdraft interest using the actual days/365 method: Interest = Outstanding Balance × Annual Interest Rate × Number of Days ÷ 365. This means interest accrues daily, on the exact drawn balance, for the exact number of days it is drawn. Example: S$10,000 drawn at 20.9% EIR for 15 days = S$10,000 × 0.209 × 15/365 = S$85.89. If you draw and repay within the same statement month, you only pay interest for the actual days the balance was outstanding — unlike a credit card which may apply interest differently. This daily calculation method means you can minimise OD costs by repaying as soon as funds are available, even if it’s only for a few days.

Singapore bank overdraft rates in 2026 vary significantly by product type: DBS Cashline (unsecured personal): approximately 20.5% EIR per annum; OCBC EasiCredit (unsecured personal): approximately 20.9% EIR per annum; UOB CashPlus (unsecured personal): approximately 20.4% EIR per annum; Maybank personal OD: approximately 18%–22% EIR; Business current account OD (major banks): Singapore Prime Rate + 2%–6%, equating to approximately 8%–12% EIR; Secured OD against fixed deposit: approximately 0.5%–1.5% above your FD rate; Secured OD against property equity: Singapore Prime Rate + 1%–2%, approximately 5%–7% EIR. Note: rates are indicative and subject to individual credit assessment. Always verify your specific facility agreement letter for the exact rate. MAS requires banks to disclose EIR in all facility agreements.

Singapore bank overdraft minimum payments vary by product: DBS Cashline: typically interest on the drawn balance for the billing period plus any fees; OCBC EasiCredit: 1% of the outstanding balance or S$20, whichever is higher; UOB CashPlus: 1% of outstanding balance or S$25, whichever is higher. The critical point: these minimum payments are designed to cover (at most) the monthly interest accrued — they do NOT reduce the principal. If you pay only the minimum, the outstanding balance remains exactly the same month after month, year after year. Total interest paid over 12 months paying minimum only on S$15,000 at 20.9% EIR: approximately S$3,135 — and you still owe the full S$15,000. This is the minimum payment trap that Mode 2 of this calculator is designed to expose.

A Singapore overdraft is cheaper than a term loan when: you only need the funds for a very short period (typically less than 30 days); you draw and repay the balance multiple times (revolving usage); you draw less than the approved limit (only paying interest on what you use). Breakeven analysis: S$10,000 at 20.9% OD vs 7% EIR term loan. OD for 30 days: S$10,000 × 20.9% × 30/365 = S$171.78. Term loan for 1 month: Monthly payment ≈S$10,070, interest ≈S$70. At 30 days: OD is MORE expensive than term loan for the same period. Actually for very short periods (1–7 days), OD wins: 7 days at 20.9% OD = S$40.08; 1 month term loan minimum interest = S$58. The realistic breakeven: OD is cost-effective only for needs of 10 days or fewer at 20.9% vs 7% EIR. For anything longer, a term loan saves significantly.

The minimum payment trap occurs when a Singapore borrower pays only the minimum required interest on their overdraft each month, leaving the principal balance completely unchanged. Mathematical proof: S$10,000 OD at 20.9% EIR. Monthly interest = S$10,000 × 20.9% / 12 = S$174.17. If you pay exactly S$174.17 each month for 12 months: total paid = S$2,090. Outstanding balance after 12 months = S$10,000 (unchanged). Outstanding balance after 10 years = S$10,000 (still unchanged). Total paid over 10 years = S$20,900 — more than double the original loan. The trap is psychologically seductive because the minimum payment is small (S$174 on S$10,000 feels manageable) and the balance “doesn’t change” (feels stable). In reality, you’re renting the debt perpetually with no exit. Convert any persistent OD balance to a term loan immediately.

Converting a Singapore overdraft balance to a term loan steps: (1) Calculate the exact outstanding OD balance (call your bank for the current figure); (2) Apply for a personal or business term loan for the same amount from any bank; (3) Upon disbursement, use the term loan funds to fully clear the OD balance; (4) Optionally reduce or close the OD facility to prevent re-accumulation of OD debt. Banks where you can do this: DBS, OCBC, UOB, Standard Chartered, Maybank. If your total unsecured debt exceeds 12× monthly income (MAS cap), you may need to explore the Debt Consolidation Plan (DCP) instead. Rate saving: 20.9% OD → 7% EIR term loan saves approximately S$1,390/year per S$10,000 converted. The conversion is worth any switching admin cost within weeks. Use our Term Loan Interest Calculator to see the exact repayment schedule after conversion.

A secured overdraft against a fixed deposit (FD) is a Singapore bank facility where you pledge your FD as collateral in exchange for an overdraft credit line at approximately 0.5%–1.5% above your FD rate. Example: OCBC 360 FD at 3% p.a. → OCBC secured OD at 3.5%–4.5% p.a. How it works: the bank places a lien on your FD (you cannot withdraw it early without penalty); in exchange, you get access to an OD line up to 80%–100% of the FD value; your FD continues to earn the full interest (no reduction); you only pay OD interest on the amount you actually draw. Why it’s powerful: your net cost = OD rate minus FD rate = 0.5%–1.5% p.a. (not the 20.9% unsecured rate). S$100,000 FD pledged: FD earns S$3,000/year; OD at 4% costs S$4,000/year if fully drawn — net cost S$1,000/year vs S$20,900 unsecured. Ask your Singapore bank specifically about “FD pledge overdraft” — DBS, OCBC, UOB, Standard Chartered, and Citibank all offer this product.

In Singapore, overdraft and revolving credit are closely related but have technical distinctions: Overdraft: formally attached to a bank current account; allows the account balance to go negative up to the approved limit; interest on the overdrawn amount using the daily actual-days/365 method; no formal monthly statement for the credit separately (it’s part of the account). Revolving credit line (e.g., DBS Cashline, OCBC EasiCredit): a standalone credit facility separate from your current account; approved credit limit you can draw via internet banking, ATM, or cheque; monthly statement showing drawn balance, minimum payment, and interest charged; can be used repeatedly within the limit without new applications. Practically, consumers use both terms interchangeably. The key shared feature is: no fixed monthly instalment, flexible drawdown and repayment, interest only on drawn balance. The key shared danger: minimum payment trap and persistent high-rate balances that never reduce.

A Singapore overdraft facility affects your Credit Bureau Singapore (CBS) report in several ways: Utilisation rate: the drawn balance vs approved limit is reported. High utilisation (above 30%–50% of limit) can hurt your credit score. Example: S$30,000 OD facility with S$25,000 drawn = 83% utilisation — likely negative signal. Minimum payments: if you only pay the minimum, CBS records you as “current” (on time) — but the high balance and utilisation show persistent debt. Hard inquiry: applying for an OD facility creates a credit inquiry on your CBS report, similar to any loan application. Payment history: late or missed OD interest payments are reported and hurt your score significantly. To minimise OD impact on your CBS score: keep utilisation below 30% of the approved limit; make more than the minimum payment; avoid holding the OD balance for extended periods; consider reducing the OD limit if it’s much larger than you need (lower limit = lower potential utilisation).

Yes — Singapore business overdraft interest is generally tax deductible if the OD is used for business income-producing purposes under Section 14 of the Income Tax Act. Requirements: the OD must be in the business’s name (not a personal OD used for business); the drawn funds must be used for business operations, not personal expenses; proper documentation of how OD funds were applied. For sole proprietors and partnerships: business OD interest is deductible against business income; if the same OD is used for mixed (personal and business) purposes, interest must be apportioned. For companies: business OD interest reduces taxable profit at the 17% Singapore corporate tax rate; effective cost = OD rate × (1 − tax rate). Example: 10% EIR business OD, 17% corporate tax → net cost = 10% × 83% = 8.3% effective. IRAS requires business purpose to be demonstrably linked to the OD drawings — maintain records of how OD funds are applied. Consult a Singapore tax professional for specific advice.

Exceeding your approved Singapore overdraft limit can result in: Rejection of transactions: the bank may decline debit card payments, cheques, or GIRO deductions if the transaction would take you above the limit; Excess interest surcharge: some banks charge a higher interest rate (often 2%–5% above the standard OD rate) on the amount exceeding the approved limit; Excess fee: a flat fee per over-limit incident (varies by bank, typically S$30–S$80); Facility review: persistent over-limit usage may trigger a credit review and reduction of your approved limit; Negative CBS impact: over-limit status may be reported to Credit Bureau Singapore. Practical prevention: set up SMS/email account alerts at 80% of your OD limit; link a savings account as a backup funding source; review your OD limit annually (you can request a limit increase based on improved income); if you regularly approach the limit, the persistent balance is better converted to a term loan.

Yes — Singapore overdraft facilities that are unsecured are included in the total unsecured credit limit cap imposed by MAS. MAS Rule: the total unsecured credit limit (across all banks combined) for a Singapore borrower earning less than S$30,000/year is capped at twice the monthly income. For borrowers earning S$30,000 or more, the cap is 12 times the monthly income. This cap covers: personal overdraft facilities, revolving credit lines (Cashline, EasiCredit, CashPlus), credit card limits, personal loan facilities. Not covered by the MAS unsecured cap: mortgages (property-secured), car loans (vehicle-secured), renovation loans (purpose-secured), secured OD against fixed deposit or property. Implication: if you already have credit cards and personal loans close to the 12× cap, a new OD facility may be declined or limited by MAS rules. If you’ve exceeded the cap due to debt accumulation, you may be eligible for a Debt Consolidation Plan (DCP) — see our DCP Calculator.

Singapore business overdraft vs personal overdraft key differences: Rate: business OD typically 8%–12% EIR (Prime + spread) vs personal unsecured OD at 18%–22% EIR; Security: business OD may be secured against accounts receivable, property, or government schemes (EFS); personal OD is typically unsecured (or vs personal property/FD); Limit: business OD limits based on business revenue and cash flow — can be S$50,000–S$500,000+; personal OD limited by income (MAS 12× cap for unsecured); Purpose: business OD for operational working capital, trade finance bridge, payroll timing gaps; personal OD for personal cash flow needs; Credit assessment: business OD assessed on business financials (3 years accounts, cash flow); personal OD assessed on personal income and CBS score; Tax: business OD interest is tax deductible; personal OD interest is not. If you run a business as a sole proprietor, separating business and personal OD facilities is important for both tax optimisation and financial clarity.

The Singapore Prime Rate is a benchmark lending rate set internally by Singapore’s major domestic banks (DBS, OCBC, UOB), currently approximately 5.25%–5.50% per annum in 2026 (subject to market conditions). Many Singapore business overdraft facilities are quoted as “Prime + spread”: a business OD at Prime + 3% = approximately 8.25%–8.50% p.a. at current rates; a secured residential property overdraft at Prime + 1.5% = approximately 6.75%–7.00% p.a. Unlike SORA (which is a daily compounded rate used for mortgages), the Prime Rate is set by each bank and does not automatically adjust with global interest rates. Changes to the Prime Rate directly affect your OD interest if your facility is Prime-based — a 0.5% Prime Rate rise increases a S$100,000 business OD cost by S$500 per year. Monitor Bank Negara / Singapore bank announcements for Prime Rate changes. Personal unsecured OD (Cashline, EasiCredit, CashPlus) is NOT Prime-based — rates are fixed as published and change only with formal bank notice.

Whether to close your Singapore overdraft facility after clearing the balance depends on your situation: Reasons to close: removing the temptation to re-accumulate debt; improving your debt-to-income ratio (useful if applying for a mortgage soon — unused OD limits still show as potential debt); reducing the complexity of your credit portfolio; some annual fees may apply even when not drawn. Reasons to keep: emergency fund access — a zero-balance OD provides a buffer you can draw within hours if needed; no interest cost if not drawn; convenience for short-term cash flow timing. Recommendation: keep a low-limit OD as an emergency buffer if you have the financial discipline not to use it casually. Consider reducing the limit to S$5,000–S$10,000 (enough for a genuine emergency) if you had a higher limit. If applying for a mortgage or major loan within 6–12 months, consider closing or reducing OD limits to improve your debt serviceability assessment (TDSR calculation uses OD limit as potential debt even if undrawn). See our TDSR Calculator in the Property section.

The three major Singapore personal revolving credit/OD products share many similarities but differ in details: DBS Cashline: rate approximately 20.5% EIR; available to Singapore citizens, PRs, and foreigners with Employment Pass; minimum income approximately S$20,000/year; limit typically 2–4× monthly income within MAS cap; access via DBS iBanking, ATM, or cheque. OCBC EasiCredit: rate approximately 20.9% EIR; minimum income approximately S$20,000/year; 1% minimum payment of outstanding (min S$20); access via OCBC internet banking, ATM withdrawal, or personal cheque. UOB CashPlus: rate approximately 20.4% EIR; minimum income approximately S$20,000/year; 1% of outstanding (min S$25) monthly minimum; access via UOB internet banking, UOB ATM Plus, or personal cheque. All three are subject to MAS’s 12× monthly income unsecured credit limit cap. Key comparison: UOB CashPlus historically has a slightly lower rate but verify at time of application. All three are expensive (20%+ EIR) — use only for genuine short-term emergencies, not as a substitute for savings.