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Interest on unpaid invoices in Maryland: 6% a year if no rate was agreed; the most you can set depends on the deal

By Yossi Grunwald, founder of Workeey · Updated

In Maryland, 6% a year if no rate was agreed; the most you can set depends on the deal. Read from Maryland's own statutes, agencies and courts, checked November 6, 2026, with every answer quoted below, and a late fee calculator.

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Maryland's rate when no rate was agreed

6% a year. Md. Const. art. III §57 sets the legal rate at 6% a year unless the General Assembly provides otherwise; Commercial Law §12-102 repeats 6% as the general limit on a loan.

The most you can set in Maryland

For a homeowner: It depends: see Md. Code, Com. Law §§12-102, 12-103. 6%, or up to 8% simple with a written agreement signed by the borrower (stated for loans). The Commercial Law usury sections are written for loans.

For a business customer: It depends: see Md. Code, Com. Law §12-103(e). Any rate on a loan to a corporation, or a commercial loan over $15,000 (not secured by a home) / over $75,000 (secured by a home). Stated for loans.

  • “Except as provided in subsections (b), (c), (d), (e), and (f) of this section, a lender may charge interest at an effective rate of simple interest not in excess of 8 percent per year on the unpaid principal balance of a loan if there is a written agreement signed by the borrower which sets forth the stated rate of interest charged by the lender.” — Md. Code, Com. Law §12-103(a), read November 6, 2026
  • “A lender may charge interest at any rate if the loan is: (i) A loan made to a corporation; (ii) A commercial loan in excess of $15,000 not secured by residential real property; or (iii) A commercial loan in excess of $75,000 secured by residential real property.” — Md. Code, Com. Law §12-103(e), read November 6, 2026

Late fees in Maryland

What the text says: Consumer contracts for goods or services: a late fee only if the contract provides it and discloses amount, conditions and timing; capped at the greater of $5/month or 10%/month of the past-due amount (max 3 monthly fees per past-due payment), OR 1.5%/month of the past-due amount; not before 15 days after the bill (or the due date if no bill); amount shown in at least 10-point bold type. Any 'consumer contract' — sale, lease or provision of goods or services for personal, family or household purposes. Business contracts: the section lets parties agree to a late fee, with the caps in (f) applying to consumer contracts.

  • “"Consumer contract" means a contract involving the sale, lease, or provision of goods or services which are for personal, family, or household purposes.” — Md. Code, Com. Law §14-1315(a), read November 6, 2026
  • “The amount of the late fee may be up to $5 per month, or up to 10% per month of the payment amount that is past due, whichever is greater; and 2. No more than 3 monthly late fees may be imposed for any single payment amount that is past due, regardless of the period during which the payment remains past due” — Md. Code, Com. Law §14-1315(f)(1)(i), read November 6, 2026
  • “The amount of the late fee may be up to 1.5% per month of the payment amount that is past due.” — Md. Code, Com. Law §14-1315(f)(1)(ii), read November 6, 2026
  • “Except as provided in subparagraph (ii) of this paragraph, a late fee included in a consumer contract pursuant to this section may not be imposed until 15 days after the date the bill was rendered for the goods or services provided.” — Md. Code, Com. Law §14-1315(f)(3)(i), read November 6, 2026
  • “The amount of the late fee under paragraph (1) of this subsection shall be disclosed, in the consumer contract or by notice, in size equal to at least 10-point bold type.” — Md. Code, Com. Law §14-1315(f)(2), read November 6, 2026

Does Maryland want it agreed in advance?

Agreed in advance: yes, in the cases below. A late fee is something the parties 'may agree to', and the contract must disclose its amount, conditions and timing (by its terms or by notice).

  • “The parties to a contract may agree to require the payment of a late fee when a party fails to make a payment when the payment is due.” — Md. Code, Com. Law §14-1315(b), read November 6, 2026
  • “A contract that requires the payment of a late fee shall disclose, by its terms or by notice: (1) The amount of the late fee; (2) The conditions under which the late fee will be imposed; and (3) The timing for the imposition of the late fee.” — Md. Code, Com. Law §14-1315(c), read November 6, 2026

Homeowners and businesses in Maryland

Maryland's own words on it are below. §14-1315(f) caps apply only to consumer contracts. Home improvement contracts are outside the prompt-payment subtitle.

  • “A late fee included in a consumer contract pursuant to this section is subject to one of the following limitations:” — Md. Code, Com. Law §14-1315(f)(1), read November 6, 2026

Prompt payment on private construction in Maryland

See the state's words below. Private construction contracts; does NOT apply to a contract for construction and sale of a single family dwelling, Custom Home Protection Act transactions, or a home improvement contract by a licensed home improvement contractor.

  • “In any action, award to the prevailing party: (i) Interest from the date the court determines that the amount owed was due; and (ii) Any reasonable costs incurred.” — Md. Code, Real Prop. §9-303(b)(2), read November 6, 2026
  • “(2) Apply to a contract for the construction and sale of a single family residential dwelling; (3) Apply to any transaction under the Custom Home Protection Act, Title 10, Subtitle 5 of this article; and (4) Apply to a home improvement contract by a contractor licensed under the Maryland Home Improvement Law.” — Md. Code, Real Prop. §9-305, read November 6, 2026

Work out a late charge in Maryland

Starts at Maryland's 6%, the rate when none was agreed, not a maximum.

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

$5.92 late charge

Days late
30
New total
$1,205.92

$1,200.00 × 6% a year × 30 days ÷ 365 = $5.92

What was not checked for Maryland

  • Maryland's retail installment sales and retail credit account laws (Com. Law §§12-501, 12-601) were not read.
  • Maryland's text does not say whether its rules on a "loan" (Com. Law §§12-102, 12-103) reach an unpaid service invoice.

Check Maryland's own text

Before you charge: read Md. Const. art. III, §57 (Maryland Manual, Maryland State Archives) and the other Maryland 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 Maryland with every state's answer, or with its neighbours just below.

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