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Interest on unpaid invoices in Arizona: 10% a year if no rate was agreed; no general cap found

By Yossi Grunwald, founder of Workeey · Updated

In Arizona, 10% a year if no rate was agreed; no general cap found. Read from Arizona's own statutes, agencies and courts, checked November 6, 2026, with every answer quoted below, and a late fee calculator.

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Arizona's rate when no rate was agreed

10% a year. 10% a year on any loan, indebtedness or obligation (other than medical debt) unless a different rate is contracted for in writing (A.R.S. § 44-1201(A)(2)). Judgments not based on a written rate: the lesser of 10% or prime + 1% (§ 44-1201(B)).

Worth knowing: interest on a court judgment. Judgment rate only (not the 10% legal rate): lesser of 10% or prime + 1% (Fed H.15).

  • “2. For any loan, indebtedness or obligation other than medical debt, interest shall be at the rate of ten percent a year, unless a different rate is contracted for in writing, in which event any rate of interest may be agreed to.” — A.R.S. § 44-1201(A)(2), read November 6, 2026
  • “B. Unless specifically provided for in statute or a different rate is contracted for in writing, interest on any judgment other than a judgment on medical debt shall be at the lesser of ten percent a year or at a rate per year that is equal to one percent plus the prime rate as published by the board of governors of the federal reserve system in statistical release H.15 or any publication that may supersede it.” — A.R.S. § 44-1201(B), read November 6, 2026

The most you can set in Arizona

For a homeowner: No general cap: any rate may be agreed in writing (medical debt excepted). A.R.S. § 44-1201(A)(2) lets the parties agree any rate in writing. Retail installment contracts carry 'a finance charge not to exceed a rate set by contract' (§ 44-6002(A)).

For a business customer: No general cap: any rate may be agreed in writing.

  • “unless a different rate is contracted for in writing, in which event any rate of interest may be agreed to.” — A.R.S. § 44-1201(A)(2), read November 6, 2026
  • “A. Under a retail installment contract, other than a retail charge account agreement, a finance charge not to exceed a rate set by contract may be charged and received.” — A.R.S. § 44-6002(A), read November 6, 2026

Late fees in Arizona

What the text says: Retail installment sales (goods or services on installments): a late charge on an installment not paid in full by the 10th day after its due date, up to $5 on an installment of $25 or less and $10 on a larger installment; in a commercial transaction, up to 5% of the unpaid installment instead (A.R.S. § 44-6002). Retail installment contracts and retail charge account agreements — a retail seller selling goods or services to a buyer who agrees to pay in more than four installments or may be charged a finance charge (A.R.S. § 44-6001). It depends: see A.R.S. §§ 44-6001, 44-6002. Alternative in § 44-6002(F): a seller who charges no finance charge may instead charge interest at any rate on the delinquent balance if the retail charge account agreement provides for it.

  • “F. The seller or holder may also charge a late payment or delinquency charge, in addition to all finance charges permitted, on each installment not paid in full upon the tenth day after its due date in an amount not to exceed five dollars on an installment of twenty-five dollars or less and ten dollars on an installment greater than twenty-five dollars.” — A.R.S. § 44-6002(F), read November 6, 2026
  • “G. Notwithstanding the late payment or delinquency charge provided in subsection B or F, in a commercial transaction, the seller or holder may charge a late payment or delinquency charge, in addition to all finance charges permitted, on each installment not paid in full upon the tenth day after its due date in an amount of not more than five per cent of the unpaid balance of the installment.” — A.R.S. § 44-6002(G), read November 6, 2026
  • “11. "Retail installment transaction" means any transaction in which a retail buyer purchases goods or services, excluding services purchased in connection with a lease, from a retail seller pursuant to a retail installment contract or a retail charge account agreement and under which the buyer agrees to pay for the goods and services in more than four installments or for which the payment of a finance charge may be required.” — A.R.S. § 44-6001(11), read November 6, 2026

Does Arizona want it agreed in advance?

Agreed in advance: yes, in the cases below. A rate other than the 10% legal rate must be 'contracted for in writing' (A.R.S. § 44-1201(A)(2)). For retail charge accounts, the interest-instead-of-late-fee alternative applies only 'if such interest charge is provided for in the retail charge account agreement' (§ 44-6002(F)).

  • “interest shall be at the rate of ten percent a year, unless a different rate is contracted for in writing, in which event any rate of interest may be agreed to.” — A.R.S. § 44-1201(A)(2), read November 6, 2026
  • “he is entitled to charge, collect and receive a delinquency charge determined by applying any rate of interest to the delinquent balance if such interest charge is provided for in the retail charge account agreement.” — A.R.S. § 44-6002(F), read November 6, 2026

Homeowners and businesses in Arizona

The late-charge cap for installment sales differs by customer type: $5/$10 per late installment in a retail installment sale, versus up to 5% of the unpaid installment 'in a commercial transaction' (A.R.S. § 44-6002(F), (G)).

  • “in a commercial transaction, the seller or holder may charge a late payment or delinquency charge, in addition to all finance charges permitted, on each installment not paid in full upon the tenth day after its due date in an amount of not more than five per cent of the unpaid balance of the installment.” — A.R.S. § 44-6002(G), read November 6, 2026

Prompt payment on private construction in Arizona

What the text says: 1.5% a month (or a higher agreed rate) on late owner payments to the contractor, and on late contractor/subcontractor payments down the chain. §§ 32-1182, -1183, -1185, -1186 do not apply to the state or its political subdivisions.

  • “Q. If an owner or a third party designated by an owner as the person responsible for making progress payments, releasing retention or making final payment on a construction contract does not make a timely payment on amounts due pursuant to this section, the owner shall pay the contractor interest at the rate of one and one-half percent a month or fraction of a month on the unpaid balance, or at a higher rate as the parties to the construction contract agree.” — A.R.S. § 32-1182(Q), read November 6, 2026
  • “at the rate of one and one-half percent per month or a fraction of a month on the unpaid balance or at such higher rate as the parties agree.” — A.R.S. § 32-1183, read November 6, 2026
  • “32-1182, 32-1183, 32-1185 and 32-1186 do not apply to this state or political subdivisions of this state.” — A.R.S. § 32-1187, read November 6, 2026
  • “1. "Construction contract" means a written or oral agreement relating to the construction, alteration, repair, maintenance, moving or demolition of any building, structure or improvement or relating to the excavation of or other development or improvement to land.” — A.R.S. § 32-1181(A)(1), read November 6, 2026

Work out a late charge in Arizona

Starts at Arizona's 10%, the rate when none was agreed, not a maximum.

Days since the due date
The rate or fee your terms set

$9.86 late charge

Days late
30
New total
$1,209.86

$1,200.00 × 10% a year × 30 days ÷ 365 = $9.86

What was not checked for Arizona

  • Arizona's statute does not define "commercial transaction" (A.R.S. § 44-6001), and that was not resolved here.

Check Arizona's own text

Before you charge: read A.R.S. § 44-1201(A)(2) and the other Arizona texts quoted on this page, or ask a lawyer. As of November 6, 2026.

This is a plain-words summary of each state's own laws as of November 6, 2026, not legal advice. Rules have exceptions. Check the state's own text, linked on every state's page, or a lawyer before you charge a late fee or interest.

Compare Arizona with every state's answer, or with its neighbours just below.

Next door to Arizona

  • California: 10% if none agreed, depends by agreement (two answers)
  • Nevada: floats if none agreed, depends by agreement
  • New Mexico: up to 15% if none agreed, depends by agreement
  • Utah: 10% if none agreed, no general cap found

Official sources for Arizona

Every state in one file: Excel and CSV downloads

Where our data comes from

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