Interest on unpaid invoices in Illinois: 5% a year if no rate was agreed; at most 9% by agreement for homeowners

Illinois's rate when no rate was agreed

5% a year. 5% a year on money due on written instruments, on money due on settlement of an account from the day the balance is ascertained, and on money withheld by unreasonable and vexatious delay.

• “Creditors shall be allowed to receive at the rate of five (5) per centum per annum for all moneys after they become due on any bond, bill, promissory note, or other instrument of writing; on money lent or advanced for the use of another; on money due on the settlement of account from the day of liquidating accounts between the parties and ascertaining the balance; on money received to the use of another and retained without the owner's knowledge; and on money withheld by an unreasonable and vexatious delay of payment.” — 815 ILCS 205/2, read November 6, 2026

The most you can set in Illinois

For a homeowner: 9% a year. 9% a year by written contract on money 'in any manner due and owing', except as the Act and other Acts (Consumer Installment Loan Act, Retail Installment Sales Act, etc.) otherwise allow.

For a business customer: It depends: see 815 ILCS 205/4. Same 9% written-contract rule for an ordinary account; § 205/4(1) lets any rate be charged on loans to a corporation and on business loans and credit between a merchandise wholesaler and retailer — the text speaks of loans/credit transactions, not service invoices.

• “in all written contracts it shall be lawful for the parties to stipulate or agree that an annual percentage rate of 9%, or any less sum, shall be taken and paid upon every $100 of money loaned or in any manner due and owing from any person to any other person or corporation in this state” — 815 ILCS 205/4(1), read November 6, 2026
• “(c) Any credit transaction between a merchandise wholesaler and retailer; any business loan to a business association or copartnership or to a person owning and operating a business as sole proprietor” — 815 ILCS 205/4(1)(a),(c), read November 6, 2026

Late fees in Illinois

What the text says: Retail installment contracts and retail charge agreements: a delinquency charge only on an installment at least 10 days late, up to 5% of an installment over $200 or $10 on an installment of $200 or less; one charge per installment. Retail installment contracts / retail charge agreements (815 ILCS 405).

• “A retail installment contract or a retail charge agreement may provide for a delinquency and collection charge, on each installment in default for a period of not less than 10 days, in an amount not exceeding 5% of the installment on installments in excess of $200 or $10 on installments of $200 or less.” — 815 ILCS 405/12, read November 6, 2026

Does Illinois want it agreed in advance?

Agreed in advance: Illinois's text read does not say so in general. § 205/2 gives 5% without any agreement; the 405/12 delinquency charge applies only where the contract 'may provide for' it.

• “In the absence of an agreement between the creditor and debtor governing interest charges, upon 30 days' written notice to the debtor, an assignee or agent of the creditor may charge and collect interest as provided in this Section on behalf of a creditor.” — 815 ILCS 205/2, read November 6, 2026

Homeowners and businesses in Illinois

Homeowner work: the Contractor Prompt Payment Act does not cover single-family homes or buildings of 12 or fewer units.

• “contracts for the design, construction, alteration, improvement, or repair of single family residences or multiple family residences with 12 or fewer units in a single building.” — 815 ILCS 603/5(b), read November 6, 2026

Prompt payment on private construction in Illinois

What the text says: It depends: see 815 ILCS 603/15(a). The owner shall pay the contractor the amount due on a payment application not more than 15 calendar days after the approval. Excludes public contracts and single-family homes or buildings with 12 or fewer residential units. Contractor Prompt Payment Act, 815 ILCS 603.

• “If a payment due pursuant to the provisions of this Act is not made in a timely manner, the delinquent party shall be liable for the amount of that payment, plus interest at a rate equal to 10% per annum.” — 815 ILCS 603/15(a), read November 6, 2026
• “except for contracts that require the expenditure of public funds and contracts for the design, construction, alteration, improvement, or repair of single family residences or multiple family residences with 12 or fewer units in a single building.” — 815 ILCS 603/5(b), read November 6, 2026
• “the owner shall pay the amount due to the contractor pursuant to the payment application not more than 15 calendar days after the approval.” — 815 ILCS 603/10(1), read November 6, 2026

Work out a late charge in Illinois

Starts at Illinois's 5%, the rate when none was agreed, not a maximum.

Check Illinois's own text

Before you charge: read 815 ILCS 205/2 and the other Illinois 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 Illinois with every state's answer, or with its neighbours just below.

Next door to Illinois

• Indiana: 8% if none agreed, depends by agreement
• Iowa: 5% if none agreed, depends by agreement
• Kentucky: 8% if none agreed, depends by agreement
• Missouri: 9% if none agreed, depends by agreement
• Wisconsin: 5% if none agreed, depends by agreement

Official sources for Illinois

• 815 ILCS 205/2 — read November 6, 2026
• 815 ILCS 205/4(1) — read November 6, 2026
• 815 ILCS 405/12 — read November 6, 2026
• 815 ILCS 603/15(a) — read November 6, 2026
• 815 ILCS 603/5(b) — read November 6, 2026
• 815 ILCS 603/10(1) — read November 6, 2026

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