Late Payment Interest Calculator

Calculate simple or compounded late-payment interest using an entered principal, annual rate and days overdue.

Estimate late-payment interest

Enter the overdue amount, permitted annual interest rate, days overdue and calculation method.

Overdue principal

Annual interest rate (%)

Days overdue

Interest method

Calculated interest—

Principal + interest—

Approx. first-day interest—

How the calculation works

Simple daily interest = principal × annual rate ÷ 365 × days overdue. Daily compounded interest = principal × ((1 + annual rate ÷ 365)^days − 1).

How to use the result

Use this as an arithmetic aid after confirming the contractual due date, permitted interest rate and whether simple or compounded interest is allowed. Keep an audit trail of the underlying invoice and payment terms.

Assumptions and limitations

Late-payment rights, statutory interest, grace periods, compounding, tax treatment and enforceability vary by contract and jurisdiction. The tool does not determine what rate is lawful or recoverable.

Example

With 100,000 overdue for 45 days at an entered 18% annual simple rate, interest is approximately 2,219.18 using a 365-day year.

Frequently asked questions

Does this tell me the legal late-payment rate?

No. Enter a rate that you have verified under the contract and applicable law.

What is the difference between simple and compounded interest?

Simple interest applies the rate to principal only; compounding adds accrued interest to the balance each day in this model.

Why use 365 days?

This calculator uses a 365-day year for daily rate conversion. If your contract specifies another day-count convention, calculate accordingly.

Does it include collection fees?

No. Add any separately permitted fees outside this interest calculation.