Interest on unpaid invoices in Connecticut: 8% a year if no rate was agreed; the most you can set depends on the deal

Connecticut's rate when no rate was agreed

8% a year. 8% a year for forbearance of money in the absence of any agreement (C.G.S. § 37-1(a)). In a lawsuit or arbitration, interest of up to 10% a year 'and no more' may be awarded as damages for detaining money after it becomes payable (§ 37-3a(a)).

• “(a) The compensation for forbearance of property loaned at a fixed valuation, or for money, shall, in the absence of any agreement to the contrary, be at the rate of eight per cent a year;” — Conn. Gen. Stat. § 37-1(a), read November 6, 2026
• “(a) Except as provided in sections 37-3b, 37-3c and 52-192a, interest at the rate of ten per cent a year, and no more, may be recovered and allowed in civil actions or arbitration proceedings under chapter 909, including actions to recover money loaned at a greater rate, as damages for the detention of money after it becomes payable.” — Conn. Gen. Stat. § 37-3a(a), read November 6, 2026

The most you can set in Connecticut

For a homeowner: 12% on loans (C.G.S. § 37-4); retail installment sales of goods other than motor vehicles: 18% APR (§ 36a-772(b)). It depends: see C.G.S. §§ 37-4, 37-9.

For a business customer: The deposit index plus seventeen per cent is for a loan made to a corporation, company, partnership or individual engaged primarily in commercial, manufacturing, industrial or nonconsumer pursuits.

How the most you can set moves: Business-loan exemption ceiling: deposit index (C.G.S. § 36a-26, set per calendar year) + 17%.

• “No person and no firm or corporation or agent thereof, other than a pawnbroker as provided in section 21-44, shall, as guarantor or otherwise, directly or indirectly, loan money to any person and, directly or indirectly, charge, demand, accept or make any agreement to receive therefor interest at a rate greater than twelve per cent per annum.” — Conn. Gen. Stat. § 37-4, read November 6, 2026
• “(b) A retail seller of goods other than motor vehicles may charge, contract for, receive or collect a finance charge on any retail installment contract made on or after July 1, 1981, covering the retail sale of goods other than motor vehicles in this state, which charge shall not exceed an annual percentage rate of twenty-one per cent on sales made prior to October 1, 1985, nineteen per cent on sales made on or after October 1, 1985, and prior to October 1, 1987, and eighteen per cent on sales made on or after October 1, 1987.” — Conn. Gen. Stat. § 36a-772(b), read November 6, 2026
• “(4) (A) any loan, carrying an annual interest rate of not more than the deposit index, as determined under section 36a-26, for the calendar year in which the loan is made plus seventeen per cent, made to a foreign or domestic corporation, statutory trust, limited liability company, general, limited or limited liability partnership or association organized for a profit or any individual, provided such corporation, trust, company, partnership, association or individual is engaged primarily in commercial, manufacturing, industrial or nonconsumer pursuits” — Conn. Gen. Stat. § 37-9(4)(A), read November 6, 2026
• “provided further that the original indebtedness to be repaid is in excess of two hundred fifty thousand dollars,” — Conn. Gen. Stat. § 37-9(4)(B), read November 6, 2026

Late fees in Connecticut

What the text says: For retail installment contracts and installment loan contracts (goods): after 10 days in default, a delinquency and collection charge of no more than the lesser of 5% of the installments in default or $10 (5% with no dollar limit for commercial vehicles) (C.G.S. § 36a-778). Retail installment contracts and installment loan contracts for goods (consumer goods and certain equipment, as defined in § 36a-770) — not service invoices.

• “The holder of a retail installment contract or installment loan contract, except a contract for the purchase of a commercial vehicle or an installment loan contract regulated by sections 36a-555 to 36a-573, inclusive, may collect a delinquency and collection charge for default in the payment of any such contract or installment of such contract, when such default has continued for a period of ten days, such charge not to exceed five per cent of the amount of the installments in default or the sum of ten dollars, whichever is the lesser.” — Conn. Gen. Stat. § 36a-778, read November 6, 2026
• “(12) "Retail installment contract" means any security agreement, as defined in subdivision (74) of subsection (a) of section 42a-9-102, made in this state, including one in the form of a mortgage, conditional sale contract or other instrument evidencing an agreement to pay the retail purchase price of goods, or any part thereof, in installments over a period of time” — Conn. Gen. Stat. § 36a-770 (definition 12), read November 6, 2026

Does Connecticut want it agreed in advance?

Agreed in advance: Connecticut's text read does not say so in general. The 8% legal rate applies 'in the absence of any agreement to the contrary' (C.G.S. § 37-1(a)).

Homeowners and businesses in Connecticut

Connecticut's § 37-9 exemptions for business loans are for funds used in commercial or nonconsumer pursuits, not for consumer purposes: personal, family or household purchases, acquisitions or uses.

• “"consumer purposes" means the utilization of funds for personal, family or household purchases, acquisitions or uses.” — Conn. Gen. Stat. § 37-9 (definition), read November 6, 2026

Prompt payment on private construction in Connecticut

See the state's words below. Private construction contracts (owner → contractor → subcontractor → supplier), C.G.S. §§ 42-158i to 42-158n. Excludes public contracts, HUD-funded/insured projects, owner–contractor contracts of $25,000 or less (and their subcontracts), and buildings for residential occupancy with four or fewer units.

• “(4) Ten days after the receipt of any notice specified in subdivisions (1), (2) and (3) of this subsection, the owner, contractor, subcontractor or supplier, as the case may be, shall be liable for interest on the amount due and owing at the rate of one per cent per month. Such interest shall accrue beginning on the date any such notice is received.” — Conn. Gen. Stat. § 42-158j(c)(4), read November 6, 2026
• “"Construction contract" or "contract" does not include (A) any public works or other building contract entered into with this state, the United States, any other state, and any municipality or other political subdivision of this state or any other state, (B) a contract or project funded or insured by the United States Department of Housing and Urban Development, (C) a contract between an owner and a contractor for an amount of twenty-five thousand dollars or less or a subcontract which results from such a contract, or (D) a contract for a building intended for residential occupancy containing four or less units.” — Conn. Gen. Stat. § 42-158i(2), read November 6, 2026

Work out a late charge in Connecticut

Starts at Connecticut's 8%, the rate when none was agreed, not a maximum.

What was not checked for Connecticut

• Connecticut's text does not say whether its 12% loan cap (C.G.S. § 37-4) reaches an agreed late-payment rate on a service invoice.
• The current deposit index behind Connecticut's business-loan ceiling (C.G.S. § 36a-26) was not read.

Check Connecticut's own text

Before you charge: read Conn. Gen. Stat. § 37-1(a) and the other Connecticut 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 Connecticut with every state's answer, or with its neighbours just below.

Next door to Connecticut

• Massachusetts: 12% if none agreed, depends by agreement
• New York: depends if none agreed, 16% for homes
• Rhode Island: 12% if none agreed, depends by agreement

Official sources for Connecticut

• Conn. Gen. Stat. § 37-1(a) — read November 6, 2026
• Conn. Gen. Stat. § 36a-772(b) — read November 6, 2026
• Conn. Gen. Stat. § 42-158j(c)(4) — read November 6, 2026

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