Statutory interest for delay: how much are they? How to calculate them?

We all pay various types of bills, sometimes we pay back installments of loans and credits, various non-bank loans, sometimes we have to pay for the service or purchased goods within a certain time, i.e. pay our invoices. Banks, loan companies and larger service providers, e.g. electricity suppliers, charge adequate default interest from the first day of arrears. We don’t always have the option, but we don’t always remember about the exact dates of payment. What happens if we overlook our repayment dates? What does the law say about this and how is interest charged for delay?

How can you calculate them yourself? 

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First of all, it should be noted that the fact of interest accruing by the creditor or consent to non-calculation, as well as the amount of interest, is usually specified in the contract between the parties. It is the contract that is the first important document indicating our obligations regarding repayment. In the event that the contract does not specify the amount of interest, the creditor shall refer to Art. 481 parish 1 of the Civil Code, which their height (also the maximum) specifies by law.

In a situation where interest begins to accrue, the creditor is not obliged to notify the debtor of this fact. His only duty is to submit his request in writing. You should also be aware that the contract may contain additional clauses regarding late repayment and handling of accrued interest, and specifying additional costs that the debtor must bear. In this case, it may be, for example, recovery costs.

How much will we pay to receive such a letter?

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Following the guidelines of the Act, a rate of 1.5% has been in force since 2016. However, in order to calculate the full amount of statutory interest for delay, the NBP reference rate (1.5%) should also include a base rate of 5.5%, which adds up to 7%. The maximum amount of statutory interest for delay is twice as much, i.e. 14%. So this is the highest possible interest rate that the creditor can enter into the contract.

If you want to calculate for yourself the amount of interest currently related to our debt, you can use special calculators posted on the Internet or calculate them traditionally. And you can do it very simply. For example – we are in arrears with a loan installment, whose monthly amount is USD 300. We paid it after 10 days. With interest fixed at 7%.

If our interest is significant for us and we would like to redeem it

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Then we have the best chance in contracts with smaller entrepreneurs and service providers, where we can count on a more individual approach. In such situations, contact with the customer and his retention may be more important than amounts of money that are not very significant for the company. With corporations, large companies and banks, the matter will be much more difficult or even impossible and you have to take into account the inevitability of paying interest.