Having a defensible number changes the tone of the conversation. Instead of a vague demand for “interest and penalties”, the lender can show a calculation, and the payer can verify it line by line.
How it is calculated
Late interest = overdue amount × (annual rate ÷ 365) × days late
Overdue amount is the payment (or balance) that was not made on time — not the whole loan, unless the whole loan fell due.
Annual rate ÷ 365 converts the yearly late-interest rate into a daily rate. Some agreements use 360 days; use whatever the agreement states.
Days late is counted from the day after the due date up to and including the day of payment.
The result is interest only — it does not include fixed late fees the agreement may also impose.
Example
An installment of 20,000 THB is 45 days late, and the agreement sets late interest at 15% per year. The daily rate is 0.15 ÷ 365, or about 8.22 THB per day on this amount, so the charge is 20,000 × 0.15 ÷ 365 × 45 = 369.86 THB.
The payer therefore owes 20,369.86 THB to clear the installment. Note how moderate the number is over 45 days — a calculated figure is often smaller than what an annoyed lender might demand, and more likely to actually get paid.
Understanding your result
Use the figure in a payment reminder or late payment notice: state the original amount, the days late, the rate from the agreement, and the resulting total. A transparent calculation is harder to dispute and easier to pay.
Important: many countries cap late interest and penalties on private and consumer debts, and courts can reduce charges they consider excessive. The rate must come from your agreement and must respect local law — this calculator computes, it does not validate the rate.
If lateness is becoming a pattern, the better fix is usually structural: a payment extension agreement or a revised installment plan, with the accrued late interest settled or explicitly waived in writing.
Frequently asked questions
Can I charge late interest if the agreement doesn't mention it?
That depends on local law. In many places a legal default rate applies to overdue debts even without a clause; in others you can only charge what was agreed. The safe practice is to put a specific late-interest rate in every agreement, so nobody has to research defaults mid-dispute.
Is there a legal maximum for late fees and penalty interest?
Frequently, yes. Many countries cap penalty interest on consumer and private debts, and courts often have power to reduce excessive charges. The cap differs by country and by type of debt, so check the rules where you live before setting or paying a high rate.
Do I count the due date itself as a late day?
The common convention is no: a payment due on the 1st and made on the 2nd is one day late. Count from the day after the due date through the day payment arrives. If the agreement defines it differently, the agreement wins — consistency matters more than the convention chosen.
Should late interest apply to the whole loan or just the missed installment?
By default, only the overdue installment. The remaining balance is not late — it is not yet due. The exception is an acceleration clause, where repeated default makes the entire balance due at once; after acceleration, late interest may run on the full amount. Your agreement should say which applies.
What is the difference between late interest and a late fee?
Late interest grows with time — so much per day on the overdue amount. A late fee is a fixed charge per missed payment, such as 200 THB per late installment. Agreements can include either or both, but both together can hit legal caps faster, so keep them reasonable.
The borrower can't pay even with the late interest added. Now what?
Chasing a growing number rarely helps. Send a clear written notice with the calculated total, then talk: a payment extension or a smaller installment plan recovers more money than pressure in most cases. Whatever you renegotiate, put it in writing and state what happens to the accrued late interest.
Results are estimates for general information only and may differ from a lender's exact figures. They are not financial or legal advice.