Calculate interest on overdue payments using daily accrual. Enter principal, annual rate, and days overdue to find total interest owed.
When payments are overdue, interest compensates the creditor for the time value of money lost. Unlike flat late fees, interest accrues daily on the outstanding principal, growing more costly the longer a bill remains unpaid.
This calculator uses a simple daily accrual method to compute how much interest has accumulated on an overdue payment. You enter the principal amount, the annual interest rate, and the number of days the payment is past due. The tool then shows the total interest accrued and the full amount owed.
Late payment interest is common in commercial contracts, real estate, lending agreements, and court judgments. Many states set a statutory interest rate (often 6–12% annually) that applies unless the parties agree to a different rate in their contract.
Legal professionals, business owners, and individuals alike benefit from transparent late payment interest calculations when evaluating obligations, settlements, or compliance requirements. Bookmark this page and return whenever circumstances change so you always have current figures at your fingertips.
Accurately calculating daily interest ensures you request the correct amount in demand letters, court filings, or settlement negotiations. Guessing or rounding can lead to under-collection or disputes. Instant recalculation as you change inputs lets you model multiple scenarios quickly, giving you the data foundation needed for well-informed legal and financial decisions.
Daily Interest = Principal × (Annual Rate / 365) Total Interest = Daily Interest × Days Overdue Total Due = Principal + Total Interest
Result: $197.26 in accrued interest
Daily interest = $10,000 × (0.08 / 365) = $2.1918/day. Over 90 days: $2.1918 × 90 = $197.26. Total owed = $10,197.26.
Simple interest charges only on the original principal. Compound interest adds prior accrued interest to the principal, so you earn interest on interest. Most overdue payment calculations use simple interest unless the contract specifies otherwise.
When drafting a demand letter, include the principal, the per diem rate, the number of days overdue, and the total interest. Specify that interest will continue to accrue until payment is received. This creates urgency and documents the accruing liability.
Federal post-judgment interest is set weekly based on Treasury bill auction results and is typically lower than state rates. State rates vary significantly, so always confirm which rate applies to your situation.
Per diem means "per day." The per diem interest rate is the annual rate divided by 365, applied to each day the balance remains unpaid. It is the standard method for calculating overdue interest in most legal and commercial contexts.
Each state sets a default interest rate that applies when a contract does not specify one. Rates range from 4% to 12% annually. Federal courts use a rate tied to Treasury securities. Always check the applicable jurisdiction.
This calculator uses simple daily interest (no compounding). Simple interest is the standard for most overdue commercial payments and court judgments unless the contract explicitly provides for compound interest.
Yes, in most jurisdictions you can charge both a late fee and accruing interest if disclosed in the contract. However, combined charges must not be excessive or violate usury laws.
Multiply the judgment amount by the statutory rate, divide by 365, and multiply by the number of days since the judgment was entered. Courts typically use simple interest unless otherwise specified.
Yes, interest accrues every calendar day, including weekends and holidays. Unlike business-day calculations, interest runs continuously from the date the payment became overdue.