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Interest on unpaid invoices in Montana: 10% a year if no rate was agreed; the most you can set depends on the deal

By Yossi Grunwald, founder of Workeey · Updated

In Montana, 10% a year if no rate was agreed; the most you can set depends on the deal. Read from Montana's own statutes, agencies and courts, checked November 6, 2026, with every answer quoted below, and a late fee calculator.

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Montana's rate when no rate was agreed

10% a year. 10% a year after the money becomes due, unless an express written contract fixes a different rate. The 10% a year is payable on the money § 31-1-106 lists, such as an account stated.

  • “unless there is an express contract in writing fixing a different rate or a law or ordinance or resolution of a public body fixing a different rate on its obligations, interest is payable on all money at the rate of 10% a year after it becomes due on:” — Mont. Code Ann. § 31-1-106 (Legal interest), read November 6, 2026
  • “(b) an account stated;” — Mont. Code Ann. § 31-1-106(1)(b), read November 6, 2026

The most you can set in Montana

For a homeowner: Greater of 15% or Fed H.15 bank prime + 6 points (prime dated 3 business days before the agreement). Does not apply to regulated lenders (31-1-111, 31-1-112). Merchant-to-merchant finance operations are exempt (31-1-112(2)).

For a business customer: Greater of 15% or Fed H.15 bank prime + 6 points. Same section 31-1-107 cap. A finance operation financing transactions between merchants (as defined in 30-2-104) is exempt from usury limits.

  • “Parties may agree in writing to the payment of any rate of interest that does not exceed the greater of 15% or an amount that is 6 percentage points per year above the prime rate published by the federal reserve system in its statistical release H.15 Selected Interest Rates for bank prime loans dated 3 business days prior to the execution of the agreement.” — Mont. Code Ann. § 31-1-107(1) (Interest rate allowed by agreement), read November 6, 2026
  • “The provisions of this section do not apply to regulated lenders as defined in 31-1-111.” — Mont. Code Ann. § 31-1-107(3), read November 6, 2026
  • “Interest must be allowed according to the terms of the agreement.” — Mont. Code Ann. § 31-1-107(1), read November 6, 2026
  • “(2) A finance operation that finances transactions between merchants, as defined in 30-2-104, is also exempt from usury limits.” — Mont. Code Ann. § 31-1-112(2), read November 6, 2026

Late fees in Montana

What the text says: Goods sold at retail on pay-on-bill terms: late payment charge up to 1.5% a month, from 30 days after the obligation is incurred. Does NOT apply to money due for intangible services. 31-1-501: retail sales of goods billed for payment on presentation of the bill (not intangible services, PSC-regulated services, real property, health care, or retail installment contracts). 31-1-235: retail installment contracts and retail charge account agreements. It expressly excludes intangible services. It depends: see Mont. Code Ann. § 31-1-501.

  • “1 1/2% per month on all money due on all accounts from 30 days after the date on which the obligation of the buyer to pay is incurred.” — Mont. Code Ann. § 31-1-501(1), read November 6, 2026
  • “The provisions of this section do not apply to money due for intangible services, for services regulated by the public service commission, for real property, for health care services,” — Mont. Code Ann. § 31-1-501(3), read November 6, 2026
  • “The late payment charge provided in this section may be charged only if at the time the obligation was incurred the seller did not intend to extend any credit beyond 30 days and any late payment of the obligation was unintended.” — Mont. Code Ann. § 31-1-501(2), read November 6, 2026
  • “may collect a delinquency charge on each installment in default for a period not less than 10 days in an amount not to exceed $10 or, alternatively, the holder may calculate a fixed delinquency fee that is expressed as an interest rate not exceeding 15% of each installment in default.” — Mont. Code Ann. § 31-1-235(1) (Delinquency fee), read November 6, 2026

Does Montana want it agreed in advance?

Agreed in advance: yes, in the cases below. Any rate other than the 10% legal rate needs an express contract in writing (31-1-106, 31-1-107). The 10% legal rate itself runs without agreement on a writing or an account stated once the money is due.

Homeowners and businesses in Montana

The construction prompt-payment interest does not reach residential projects under $400,000.

  • “The provisions of this part do not apply to residential projects or improvements to real property intended for residential purposes with a total cost of less than $400,000.” — Mont. Code Ann. § 28-2-2107, read November 6, 2026

Prompt payment on private construction in Montana

What the text says: 1.5% a month on a payment delayed more than 30 days past the contract due date (owner to contractor, contractor to subcontractor). Written construction contracts between an owner (governmental or private) and a contractor, and subcontracts. Does not apply to residential projects or residential improvements with a total cost under $400,000.

  • “is delayed by more than 30 days from the date the payment is required by the contract to be made, the owner shall pay to the contractor interest, beginning on the day following the date when the payment is due, at the rate of 1 1/2% a month or a pro rata fraction of that amount on the unpaid balance.” — Mont. Code Ann. § 28-2-2104(1) (Obligations upon delay of payment), read November 6, 2026
  • “a governmental entity or private entity that has a legal interest in the real property improved or to be improved by the performance of the construction contract” — Mont. Code Ann. § 28-2-2101 (Definitions), read November 6, 2026
  • “The provisions of this part do not apply to residential projects or improvements to real property intended for residential purposes with a total cost of less than $400,000.” — Mont. Code Ann. § 28-2-2107 (Exception for certain residential dwellings), read November 6, 2026

Work out a late charge in Montana

Starts at Montana'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 Montana

  • Montana's text does not define whether a trade's labor counts as "intangible services" (31-1-501).

Check Montana's own text

Before you charge: read Mont. Code Ann. § 31-1-106 (Legal interest) and the other Montana 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 Montana with every state's answer, or with its neighbours just below.

Next door to Montana

  • Idaho: 12% if none agreed, no general cap found
  • North Dakota: 6% if none agreed, depends by agreement
  • South Dakota: 15% if none agreed, depends by agreement
  • Wyoming: 7% if none agreed, depends by agreement

Official sources for Montana

Every state in one file: Excel and CSV downloads

Where our data comes from

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