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

Pennsylvania's rate when no rate was agreed

6% a year. A document that says 'with interest' without a rate, or refers to the 'legal rate of interest', means 6% a year.

• “Reference in any law or document enacted or executed heretofore or hereafter to "legal rate of interest" and reference in any document to an obligation to pay a sum of money "with interest" without specification of the applicable rate shall be construed to refer to the rate of interest of six per cent per annum.” — 41 P.S. § 202 (Loan Interest and Protection Law, Act 6 of 1974, § 202), read November 6, 2026

The most you can set in Pennsylvania

For a homeowner: The 6% per annum maximum lawful rate of interest is for the loan or use of money of $50,000 or less, and it does not apply to an obligation of more than $50,000, an unsecured, noncollateralized loan in excess of $35,000, or business loans of any principal amount (41 P.S. § 201). Exceptions: obligations over $50,000, unsecured loans over $35,000, business loans. It depends: see 41 P.S. § 201.

For a business customer: No cap under 41 P.S. § 201 for business loans of any principal amount.

• “the maximum lawful rate of interest for the loan or use of money in an amount of fifty thousand dollars ($50,000) or less in all cases where no express contract shall have been made for a less rate shall be six per cent per annum.” — 41 P.S. § 201(a) (Act 6 of 1974, § 201(a)), read November 6, 2026
• “The maximum lawful rate of interest set forth in this section shall not apply to: (1) an obligation to pay a sum of money in an original bona fide principal amount of more than fifty thousand dollars ($50,000); (2) an unsecured, noncollateralized loan in excess of thirty-five thousand dollars ($35,000); or (3) business loans of any principal amount.” — 41 P.S. § 201(b) (Act 6 of 1974, § 201(b)), read November 6, 2026

Late fees in Pennsylvania

What the text says: Consumer goods/services installment (closed-end credit) agreements: after at least 10 days in default, the lesser of 5% of the installment or $10, once per installment. Home improvement installment contracts: the lesser of 5% or $5 after at least 10 days. Home improvement services are excluded from the goods-and-services chapter and fall under the Home Improvement Finance Act. Both fees are on an installment in default: under a closed-end credit agreement, or a home improvement installment contract in which the buyer promises to pay in installments.

• “A closed-end credit agreement may provide for the payment by the buyer of a late fee on each installment in default for a period of not less than ten days in an amount not in excess of 5% of the installment or $10, whichever is less.” — 12 Pa.C.S. § 6343, read November 6, 2026
• “Only one late fee may be collected on an installment regardless of the period that it remains in default.” — 12 Pa.C.S. § 6343, read November 6, 2026
• “"Services." (1) Work, labor and services for other than a commercial or business use.” — 12 Pa.C.S. § 6302 (definition of "Services"), read November 6, 2026
• “(3) The term excludes the following: (i) Services covered under the act of August 14, 1963 (P.L.1082, No.464), known as the Home Improvement Finance Act.” — 12 Pa.C.S. § 6302 (definition of "Services"), read November 6, 2026
• “A home improvement installment contract may provide for the payment by the buyer of a delinquency and collection charge on each installment in default for a period of not less than ten days in an amount not in excess of five per cent of such installment or five dollars ($5), whichever is less” — 73 P.S. § 500-209 (Home Improvement Finance Act, Act 464 of 1963, § 209), read November 6, 2026
• “"Home improvement installment contract" or "contract" means an agreement covering a home improvement installment sale, whether contained in one or more documents, together with any accompanying promissory note or other evidence of indebtedness, to be performed in this Commonwealth pursuant to which the buyer promises to pay in installments all or any part of the time sale price or prices of goods and services, or services.” — 73 P.S. § 500-102 (Home Improvement Finance Act, definition), read November 6, 2026

Does Pennsylvania want it agreed in advance?

Agreed in advance: yes, in the cases below. In both, the fee is one the agreement or contract may provide for: a closed-end credit agreement may provide for the payment by the buyer of a late fee, and a home improvement installment contract may provide for a delinquency and collection charge.

• “A closed-end credit agreement may provide for the payment by the buyer of a late fee on each installment in default for a period of not less than ten days in an amount not in excess of 5% of the installment or $10, whichever is less.” — 12 Pa.C.S. § 6343, read November 6, 2026
• “A home improvement installment contract may provide for the payment by the buyer of a delinquency and collection charge on each installment in default for a period of not less than ten days in an amount not in excess of five per cent of such installment or five dollars ($5), whichever is less” — 73 P.S. § 500-209 (Home Improvement Finance Act, Act 464 of 1963, § 209), read November 6, 2026
• “Reference in any law or document enacted or executed heretofore or hereafter to "legal rate of interest" and reference in any document to an obligation to pay a sum of money "with interest" without specification of the applicable rate shall be construed to refer to the rate of interest of six per cent per annum.” — 41 P.S. § 202 (Loan Interest and Protection Law, Act 6 of 1974, § 202), read November 6, 2026

Homeowners and businesses in Pennsylvania

Pennsylvania's late-fee caps are consumer rules: the goods-and-services chapter covers services 'for other than a commercial or business use', and the Home Improvement Finance Act covers home improvement installment contracts (not commercial property).

• “"Services." (1) Work, labor and services for other than a commercial or business use.” — 12 Pa.C.S. § 6302 (definition of "Services"), read November 6, 2026
• “"Home improvement installment contract" or "contract" means an agreement covering a home improvement installment sale, whether contained in one or more documents, together with any accompanying promissory note or other evidence of indebtedness, to be performed in this Commonwealth pursuant to which the buyer promises to pay in installments all or any part of the time sale price or prices of goods and services, or services.” — 73 P.S. § 500-102 (Home Improvement Finance Act, definition), read November 6, 2026
• “The maximum lawful rate of interest set forth in this section shall not apply to: (1) an obligation to pay a sum of money in an original bona fide principal amount of more than fifty thousand dollars ($50,000); (2) an unsecured, noncollateralized loan in excess of thirty-five thousand dollars ($35,000); or (3) business loans of any principal amount.” — 41 P.S. § 201(b) (Act 6 of 1974, § 201(b)), read November 6, 2026

Prompt payment on private construction in Pennsylvania

What the text says: 1% a month on progress/final payments not paid within 7 days of the due date (owner → contractor), and from the next day on late payments to subcontractors; plus a 1%-a-month penalty if payment was wrongfully withheld. Private construction (owner → contractor → subcontractor) except projects of six or fewer residential units built simultaneously. Contractor and Subcontractor Payment Act. Does not apply to improvements to real property of six or fewer residential units under construction at once — so single homes are generally outside it.

• “Except as otherwise agreed by the parties, if any progress or final payment to a contractor is not paid within seven days of the due date established in subsection (c), the owner shall pay the contractor, beginning on the eighth day, interest at the rate of 1% per month or fraction of a month on the balance that is at the time due and owing.” — 73 P.S. § 505(d) (Contractor and Subcontractor Payment Act, § 5(d)), read November 6, 2026
• “If any progress or final payment to a subcontractor is delayed beyond the date established in subsection (b) or (c), the contractor or subcontractor shall pay the subcontractor interest, beginning on the next day, at the rate provided for in section 5(d) on the balance that is at the time due and owing.” — 73 P.S. § 507(d) (Contractor and Subcontractor Payment Act, § 7(d)), read November 6, 2026
• “This act shall not apply to improvements to real property which consists of six or fewer residential units which are under construction simultaneously.” — 73 P.S. § 503(a) (Contractor and Subcontractor Payment Act, § 3(a)), read November 6, 2026
• “the arbitrator or court shall award, in addition to all other damages due, a penalty equal to 1% per month of the amount that was wrongfully withheld.” — 73 P.S. § 512 (Contractor and Subcontractor Payment Act, § 12(a)), read November 6, 2026

Work out a late charge in Pennsylvania

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

What was not checked for Pennsylvania

• Pennsylvania's text does not say plainly whether its 6% ceiling (41 P.S. § 201, on the "loan or use of money") covers interest on an unpaid one-payment service invoice.

Check Pennsylvania's own text

Before you charge: read 41 P.S. § 202 (Loan Interest and Protection Law, Act 6 of 1974, § 202) and the other Pennsylvania 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 Pennsylvania with every state's answer, or with its neighbours just below.

Next door to Pennsylvania

• Delaware: floats if none agreed, depends by agreement
• Maryland: 6% if none agreed, depends by agreement
• New Jersey: depends if none agreed, 16% for homes
• New York: depends if none agreed, 16% for homes
• Ohio: floats if none agreed, 8% for homes
• West Virginia: 6% if none agreed, depends by agreement

Official sources for Pennsylvania

• 41 P.S. § 202 (Loan Interest and Protection Law, Act 6 of 1974, § 202) — read November 6, 2026
• 12 Pa.C.S. § 6343 — read November 6, 2026
• 73 P.S. § 500-209 (Home Improvement Finance Act, Act 464 of 1963, § 209) — read November 6, 2026
• 73 P.S. § 505(d) (Contractor and Subcontractor Payment Act, § 5(d)) — read November 6, 2026

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