What is Loan Late Payment Interest? How is it Calculated and Which Loans Does it Apply To?

Understand the Interest Charged on Overdue Loan Installments

Loan late payment interest is a penalty interest charged by the bank if you fail to pay your loan installments by the due date. This interest is calculated only on the overdue principal for the duration of the delay.

In This Guide:

• What is late payment interest?

• How is it calculated?

• Which types of loans does it apply to?

• Are taxes like BSMV and KKDF applied on this interest?

💡 Want to calculate it instantly? Use the Loan Late Payment Interest Calculator at the top of the page to determine the total penalty in seconds.

What is Loan Late Payment Interest?

Late payment interest is the penalty interest applied by the bank on an overdue loan installment after the due date, as specified in the loan agreement.

This interest compensates the bank for lost income and the risk associated with late payment.

What is the Late Payment Interest Rate?

The late payment interest rate is usually 30% higher than the regular monthly loan interest rate.

Example:

• Monthly loan interest rate: 1%

• Late payment interest rate: 1 + (1 × 0.30) = 1.30%

📌 Note: This rate may vary depending on the type of loan. Always check your loan agreement for exact rates.

How is Late Payment Interest Calculated?

The calculation steps are as follows:

1. Determine the late payment interest rate (regular loan rate + 30%).

2. Convert the monthly rate to a daily rate: daily_rate = monthly_rate / 30.

3. Calculate the late interest: Late Interest = overdue installment × daily_rate × number_of_days_overdue.

Example Calculation:

• Overdue installment: $1,000

• Monthly loan interest: 1% → Late payment interest: 1.30%

• Daily interest: 1.30% / 30 = 0.000433

• Delay: 10 days

Late Interest = $1,000 × 0.000433 × 10 = $4.33

⚠️ Note: For mortgage loans, this is the total late interest. For car loans and personal loans, add 5% BSMV and 15% KKDF taxes to the late interest.

Which Loans Have Late Payment Interest?

• Personal Loans

• Car Loans

• Mortgage Loans

Late payment interest applies to all types of loans, though tax regulations may differ.

Are Taxes (BSMV and KKDF) Applied?

1. Mortgage Loans: No BSMV or KKDF on late interest.

2. Car and Personal Loans: Add 5% BSMV + 15% KKDF to the late interest.

💡 Note: Taxes are applied on interest, not the principal installment.

How is the Delay Period Calculated?

The delay period is the number of days between the day after the due date and the actual payment date.

Example:

• Due date: 01.02.2025

• Actual payment date: 10.02.2025

• Delay period: 02.02.2025 – 10.02.2025 = 9 days

Frequently Asked Questions (FAQ)

🔹 Is the late interest always 30% higher than the loan interest?
Yes, it is generally applied as 30% above the monthly loan interest rate.

🔹 Are taxes added to the late interest?
Yes, for car and personal loans: 5% BSMV and 15% KKDF. Mortgage loans are exempt.

🔹 Does paying late affect my credit score?
Yes, overdue payments can be reported to credit bureaus. Long-term delays may reduce your credit score.

🔹 Can I reduce late payment interest?
No, legally fixed rates are applied. However, you can contact your bank to arrange a repayment plan.

Conclusion: Plan Ahead to Avoid Late Interest

Late payment interest can significantly affect your financial situation. Therefore:

• Track your installment due dates

• Consider using automatic payments

• If you are delayed, pay as soon as possible

🏦 Warning: This calculator is for informational purposes only. For exact rates, always check your loan agreement or contact your bank.