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Interest on unpaid invoices in New York: no single rate if none was agreed; at most 16% by agreement for homeowners

By Yossi Grunwald, founder of Workeey · Updated

In New York, no single rate if none was agreed; at most 16% by agreement for homeowners. Read from New York's own statutes, agencies and courts, checked November 6, 2026, with every answer quoted below, and a late fee calculator.

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New York's rate when no rate was agreed

What the text says: It depends: see N.Y. C.P.L.R. 5004(a). 9% a year (nine per centum per annum) in general; 2% a year (two per centum per annum) in an action arising out of a consumer debt where a natural person is a defendant. Interest is recovered upon a sum awarded because of a breach of performance of a contract (CPLR 5001(a)), computed from the earliest ascertainable date the cause of action existed (CPLR 5001(b)). "Consumer debt" means an obligation of a natural person arising out of a transaction primarily for personal, family or household purposes (CPLR 5004(b)).

  • “Interest shall be at the rate of nine per centum per annum, except where otherwise provided by statute; provided the annual rate of interest to be paid in an action arising out of a consumer debt where a natural person is a defendant shall be two per centum per annum” — N.Y. C.P.L.R. 5004(a) (Rate of interest), read November 6, 2026
  • “"consumer debt" means any obligation or alleged obligation of any natural person to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family or household purposes” — N.Y. C.P.L.R. 5004(b), read November 6, 2026
  • “Interest shall be recovered upon a sum awarded because of a breach of performance of a contract, or because of an act or omission” — N.Y. C.P.L.R. 5001(a) (Interest to verdict, report or decision), read November 6, 2026
  • “Interest shall be computed from the earliest ascertainable date the cause of action existed, except that interest upon damages” — N.Y. C.P.L.R. 5001(b), read November 6, 2026

The most you can set in New York

For a homeowner: 16% a year. Civil usury: GOL 5-501(1) sets 6% unless a different rate is prescribed in Banking Law 14-a, which sets the maximum at 16% a year. No law regulating the maximum rate of interest, except section 190.40 and section 190.42 of the penal law, applies to a loan or forbearance of $250,000 or more, other than one secured primarily by real property improved by a one or two family residence (Gen. Oblig. Law § 5-501(6)(a)).

For a business customer: No corporation shall interpose the defense of usury in any action (Gen. Oblig. Law § 5-521(1)), and Penal Law § 190.40 reaches a rate exceeding twenty-five per centum per annum.

  • “The rate of interest, as computed pursuant to this title, upon the loan or forbearance of any money, goods, or things in action, except as provided in subdivisions five and six of this section or as otherwise provided by law, shall be six per centum per annum unless a different rate is prescribed in section fourteen-a of the banking law.” — N.Y. Gen. Oblig. Law § 5-501(1), read November 6, 2026
  • “The maximum rate of interest provided for in section 5-501 of the general obligations law shall be sixteen per centum per annum.” — N.Y. Banking Law § 14-a(1), read November 6, 2026
  • “at a rate exceeding twenty-five per centum per annum or the equivalent rate for a longer or shorter period.” — N.Y. Penal Law § 190.40 (Criminal usury in the second degree), read November 6, 2026
  • “No law regulating the maximum rate of interest which may be charged, taken or received, except section 190.40 and section 190.42 of the penal law, shall apply to any loan or forbearance in the amount of two hundred fifty thousand dollars or more, other than a loan or a forbearance secured primarily by an interest in real property improved by a one or two family residence.” — N.Y. Gen. Oblig. Law § 5-501(6)(a), read November 6, 2026
  • “No corporation shall hereafter interpose the defense of usury in any action.” — N.Y. Gen. Oblig. Law § 5-521(1), read November 6, 2026

Late fees in New York

What the text says: Consumer retail instalment sales (goods, and services including home repairs and improvements): a delinquency and collection charge only if the contract provides, only on an instalment at least 10 days in default, not over the rate in the contract, and only once per instalment. Retail instalment credit agreements may set a late fee for an unpaid instalment. Personal Property Law Article 10 (Retail Instalment Sales Act): retail instalment contracts/obligations and retail instalment credit agreements for goods and services bought for other than commercial or business use.

  • “A contract or obligation may provide for the payment by the buyer of a delinquency and collection charge on each instalment in default for a period of not less than ten days in an amount not in excess of the rate provided for in the contract or obligation on such instalment provided that only one such delinquency and collection charge may be collected on any such instalment regardless of the period during which it remains in default.” — N.Y. Pers. Prop. Law § 402 (Provisions of retail instalment contracts and obligations), read November 6, 2026
  • “The retail installment credit agreement may provide for the assessment of a fee for any installment which is not paid on or before the date on which it is due.” — N.Y. Pers. Prop. Law § 413 (Retail instalment credit agreements), read November 6, 2026
  • “work, labor and services furnished, or agreed to be furnished, for other than a commercial or business use, in the delivery, installation, servicing, repair or improvement of goods or repairs, alterations or improvements upon or in connection with real property” — N.Y. Pers. Prop. Law § 401 (Definitions) — services, read November 6, 2026

Does New York want it agreed in advance?

Agreed in advance: yes, in the cases below. Under the Retail Instalment Sales Act a delinquency charge or late fee may be collected only if the contract/agreement provides for it (PPL §§ 402, 413).

  • “A contract or obligation may provide for the payment by the buyer of a delinquency and collection charge on each instalment in default for a period of not less than ten days” — N.Y. Pers. Prop. Law § 402, read November 6, 2026

Homeowners and businesses in New York

Consumer instalment sales of services (including home repairs) fall under the Retail Instalment Sales Act, where a delinquency charge must be in the contract. The prompt payment law does not reach a residential construction project whose aggregate size is 4,500 square feet or less (Gen. Bus. Law § 756).

  • “the annual rate of interest to be paid in an action arising out of a consumer debt where a natural person is a defendant shall be two per centum per annum” — N.Y. C.P.L.R. 5004(a), read November 6, 2026

Prompt payment on private construction in New York

What the text says: 1% a month on the unpaid balance from the day after payment is due (owner → contractor; contractor → subcontractor). It covers a construction project whose aggregate cost equals or exceeds $150,000, and it leaves out any residential construction project whose aggregate size is 4,500 square feet or less (Gen. Bus. Law § 756).

Work out a late charge in New York

Set your own rate.

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

— late charge

Days late
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New total
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What was not checked for New York

  • New York's exclusion of homes from its prompt-payment law (GBL § 756) is quoted in parts, not whole.

Check New York's own text

Before you charge: read N.Y. C.P.L.R. 5004(a) (Rate of interest) and the other New York 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.

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