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

Kentucky's rate when no rate was agreed

8% a year. Where a written contract sets no rate, interest after default runs at the legal rate until judgment (KRS 360.010(4)).

• “Except as provided in KRS 360.040, the legal rate of interest is eight percent (8%) per annum, but any party or parties may agree, in writing, for the payment of interest in excess of that rate as follows:” — KRS 360.010(1) Legal interest rate -- Agreement for higher rate, read November 6, 2026
• “The party entitled to be paid in any written contract or obligation not specifying a rate of interest or to which no interest rate otherwise applies shall be entitled to recover interest after default and until judgment at the legal rate of interest.” — KRS 360.010(4), read November 6, 2026

The most you can set in Kentucky

For a homeowner: Original principal $15,000 or less: the lesser of 19% or 4% above the Federal Reserve discount rate on 90-day commercial paper; over $15,000: any rate agreed in writing.

For a business customer: Same as consumer: $15,000 or less — lesser of 19% or 4% above the Fed discount rate on 90-day commercial paper; over $15,000 — any rate agreed in writing.

How the most you can set moves: KRS 360.010(1)(a): for principal ≤ $15,000, cap = lesser of 19% or Fed discount rate on 90-day commercial paper + 4% — no current figure published by the state.

• “(a) At a per annum rate not to exceed four percent (4%) in excess of the discount rate on ninety (90) day commercial paper in effect at the Federal Reserve Bank in the Federal Reserve District where the transaction is consummated or nineteen percent (19%), whichever is less, on money due or to become due upon any contract or other obligation in writing where the original principal amount is fifteen thousand dollars ($15,000) or less; and (b) At any rate on money due or to become due upon any contract or other obligation in writing where the original principal amount is in excess of fifteen thousand dollars ($15,000).” — KRS 360.010(1)(a)-(b), read November 6, 2026
• “At any rate on money due or to become due upon any contract or other obligation in writing where the original principal amount is in excess of fifteen thousand dollars ($15,000).” — KRS 360.010(1)(b), read November 6, 2026

Late fees in Kentucky

What the text says: Retail installment contracts: delinquency and collection charge only if the contract provides for it, on an installment in default more than 10 days, max the greater of 5% of the installment or $15. Retail installment contracts for goods or services bought primarily for personal, family or household use (not commercial or business use), with a time price differential, from a 'retail seller' — defined as a person regularly and principally engaged in selling goods to retail buyers. A service-only business may not be a 'retail seller' as defined (principally selling goods), and a one-time invoice with no time price differential is not a retail installment transaction.

• “The holder of any retail installment contract, if it so provides, may collect a delinquency and collection charge on each installment in default for a period of more than ten (10) days in the amount not to exceed five (5%) percent of each installment or fifteen dollars ($15), whichever is greater.” — KRS 371.270(1) Delinquency and collection charge for installment defaults, read November 6, 2026
• “"Services" means work, labor or services of any kind when purchased primarily for personal, family or household use and not for commercial or business use” — KRS 371.210(2) "Services", read November 6, 2026
• “"Retail seller" or "seller" means a person regularly and principally engaged in the business of selling goods to retail buyers.” — KRS 371.210(5) "Retail seller", read November 6, 2026

Does Kentucky want it agreed in advance?

Agreed in advance: yes, in the cases below. The retail installment delinquency charge applies only if the contract 'so provides' (KRS 371.270(1)).

• “The holder of any retail installment contract, if it so provides, may collect a delinquency and collection charge” — KRS 371.270(1), read November 6, 2026

Homeowners and businesses in Kentucky

Retail installment protections (incl. the late-charge cap) cover only goods/services for personal, family or household use.

• “when purchased primarily for personal, family or household use and not for commercial or business use” — KRS 371.210(2), read November 6, 2026

Prompt payment on private construction in Kentucky

See the state's words below. Excludes routine maintenance of existing structures.

• “Except as provided in subsection (7) of this section, if the contracting entity fails to pay a contractor within thirty (30) business days following receipt of a timely, properly completed, undisputed request for payment, the contracting entity shall pay interest to the contractor beginning on the thirty-first business day after receipt of the request for payment, computed at the rate of twelve percent (12%) per annum on the unpaid amount.” — KRS 371.405(6) Payment of amounts due, read November 6, 2026
• “If a contractor fails to pay a subcontractor any undisputed amounts due within fifteen (15) business days of receipt of payment from the contracting entity, the contractor shall pay interest to the subcontractor beginning on the sixteenth business day after receipt of payment by the contractor, computed at the rate of twelve percent (12%) per annum on the unpaid amount.” — KRS 371.405(9), read November 6, 2026
• “"Construction" means the process of building, altering, repairing, improving, or demolishing any structures or buildings, or other improvements of any kind to any real property, but does not include processing equipment used for the process of manufacturing or the routine maintenance of existing structures, buildings, or real property;” — KRS 371.400(1) "Construction", read November 6, 2026

Work out a late charge in Kentucky

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

What was not checked for Kentucky

• No current figure for the other half of Kentucky's cap (4% above the Federal Reserve discount rate on 90-day commercial paper) was found on a Kentucky page, so it is given as the formula only.

Check Kentucky's own text

Before you charge: read KRS 360.010(1) Legal interest rate -- Agreement for higher rate and the other Kentucky 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 Kentucky with every state's answer, or with its neighbours just below.

Next door to Kentucky

• Illinois: 5% if none agreed, 9% for homes
• Indiana: 8% if none agreed, depends by agreement
• Missouri: 9% if none agreed, depends by agreement
• Ohio: floats if none agreed, 8% for homes
• Tennessee: up to 10% if none agreed (not fully confirmed)
• Virginia: 6% if none agreed, depends by agreement
• West Virginia: 6% if none agreed, depends by agreement

Official sources for Kentucky

• KRS 360.010(1) Legal interest rate -- Agreement for higher rate — read November 6, 2026
• KRS 371.270(1) Delinquency and collection charge for installment defaults — read November 6, 2026
• KRS 371.210(2) "Services" — read November 6, 2026
• KRS 371.405(6) Payment of amounts due — read November 6, 2026
• KRS 371.400(1) "Construction" — read November 6, 2026

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