Interest on unpaid invoices in Vermont: 12% a year if no rate was agreed; the most you can set depends on the deal

Vermont's rate when no rate was agreed

12% a year. 12% a year (actuarial method) for forbearance or use of money, except as specifically provided by law. It depends: see 9 V.S.A. § 41a(a).

• “(a) Except as specifically provided by law, the rate of interest or the sum allowed for forbearance or use of money shall be 12 percent per annum computed by the actuarial method.” — 9 V.S.A. § 41a(a), read November 6, 2026

The most you can set in Vermont

For a homeowner: Except as specifically provided by law, the rate is 12 percent per annum; for a retail installment contract the finance charge shall not exceed 18 percent per annum of the first $500 and 15 percent per annum in excess of $500. It depends: see 9 V.S.A. § 41a(a)–(b) for the category that fits the account.

For a business customer: Any agreed rate for obligations of corporations, or obligations incurred to finance income-producing business or activity (not a 1–4 family dwelling used as the borrower's residence).

• “(a) Except as specifically provided by law, the rate of interest or the sum allowed for forbearance or use of money shall be 12 percent per annum computed by the actuarial method.” — 9 V.S.A. § 41a(a), read November 6, 2026
• “(2) For a retail installment contract the finance charge shall not exceed 18 percent per annum of the first $500.00 of the balance subject to finance charges and 15 percent per annum of the balance subject to finance charges in excess of $500.00.” — 9 V.S.A. § 41a(b)(2), read November 6, 2026
• “(9) For a retail charge agreement the finance charge shall be the rate or rates agreed upon by the parties to such charge agreement but not to exceed 21 percent per annum.” — 9 V.S.A. § 41a(b)(9), read November 6, 2026
• “(5) For an installment loan not otherwise limited by subdivisions (1)-(4) of this subsection, the interest rate shall not exceed 24 percent per annum on the first $1,000.00 of the aggregate balance outstanding; and shall not exceed 12 percent per annum of the aggregate balance outstanding in excess of $1,000.00; or 18 percent annual percentage rate on the aggregate balance outstanding, whichever is higher.” — 9 V.S.A. § 41a(b)(5), read November 6, 2026
• “the parties may contract for a rate of interest in excess of the rate provided in section 41a of this title in the case of: (1) obligations of corporations, including municipal and nonprofit corporations; (2) obligations incurred by any person, partnership, association, or other entity to finance in whole or in part income-producing business or activity, but not including obligations incurred to finance family dwellings of four units or fewer when used as a residence by the borrower” — 9 V.S.A. § 46, read November 6, 2026

Late fees in Vermont

What the text says: Retail installment contracts (consumer): a 'reasonable delinquency charge if provided for in the contract' — no percentage or dollar cap in the text.

• “(m) The holder of any retail installment contract may collect a reasonable delinquency charge if provided for in the contract.” — 9 V.S.A. § 2405(m), read November 6, 2026
• “(A) With respect to retail installment contracts, work, labor, and services furnished for personal, family, or household use, and not for commercial, industrial, or agricultural use, in connection with the delivery, installation, servicing, repair, or improvement of goods sold under such contract” — 9 V.S.A. § 2401 (definition of "Services"), read November 6, 2026

Does Vermont want it agreed in advance?

Agreed in advance: yes, in the cases below. The RISA delinquency charge must be 'provided for in the contract' (9 V.S.A. § 2405(m)).

• “(m) The holder of any retail installment contract may collect a reasonable delinquency charge if provided for in the contract.” — 9 V.S.A. § 2405(m), read November 6, 2026

Homeowners and businesses in Vermont

Business/corporate obligations may carry any agreed rate (9 V.S.A. § 46).

• “the parties may contract for a rate of interest in excess of the rate provided in section 41a of this title in the case of: (1) obligations of corporations, including municipal and nonprofit corporations; (2) obligations incurred by any person, partnership, association, or other entity to finance in whole or in part income-producing business or activity, but not including obligations incurred to finance family dwellings of four units or fewer when used as a residence by the borrower” — 9 V.S.A. § 46, read November 6, 2026
• “(A) With respect to retail installment contracts, work, labor, and services furnished for personal, family, or household use, and not for commercial, industrial, or agricultural use, in connection with the delivery, installation, servicing, repair, or improvement of goods sold under such contract” — 9 V.S.A. § 2401 (definition of "Services"), read November 6, 2026

Prompt payment on private construction in Vermont

What the text says: Unless otherwise agreed, owner pays interim and final invoices 20 days after the end of the billing period or delivery of the invoice, whichever is later, with interest from day 21 at the rate 'established by 12 V.S.A. § 2903(b)'. All construction contracts on Vermont real property (owner → contractor → subcontractor), public and private. It depends: see 9 V.S.A. §§ 4002, 4007.

Two answers: the rate Vermont's prompt payment law points to is not where it says; see "Where Vermont's own sources give two answers" below.

• “(5) "Construction contract" means any agreement, whether written or oral, to perform work on any real property located within the State of Vermont.” — 9 V.S.A. § 4001(5), read November 6, 2026
• “(3) "Owner" means a person or entity having an interest in real property on which work is performed, if the person or entity has agreed to or requested such work.” — 9 V.S.A. § 4001(3), read November 6, 2026
• “(c) Except as otherwise agreed, payment of interim and final invoices shall be due from the owner 20 days after end of billing period or 20 days after delivery of invoice, whichever is later.” — 9 V.S.A. § 4002(c), read November 6, 2026
• “(d) Except as otherwise agreed, if any progress or final payment to a contractor is delayed beyond the due date established in subsection (c) of this section, the owner shall pay the contractor interest, beginning on the 21st day, at an interest rate equal to that established by 12 V.S.A. § 2903(b), on such unpaid balance as may be due.” — 9 V.S.A. § 4002(d), read November 6, 2026
• “the arbitrator or court shall award, in addition to all other damages due and as a penalty, an amount equal to one percent per month of all sums as to which payment has wrongfully been withheld.” — 9 V.S.A. § 4007(b), read November 6, 2026

Where Vermont's own sources give two answers

Vermont's prompt payment law sets interest at a rate equal to that established by 12 V.S.A. § 2903(b), but § 2903(a) as read today makes a judgment lien effective for eight years and states no interest rate. The one rate the prompt payment law states in its own words is the penalty a court or arbitrator adds: one percent per month of all sums wrongfully withheld (9 V.S.A. § 4007(b)).

Vermont's own words, both sides:

• “(d) Except as otherwise agreed, if any progress or final payment to a contractor is delayed beyond the due date established in subsection (c) of this section, the owner shall pay the contractor interest, beginning on the 21st day, at an interest rate equal to that established by 12 V.S.A. § 2903(b), on such unpaid balance as may be due.” — 9 V.S.A. § 4002(d), read November 6, 2026
• “(a) A judgment lien shall be effective for eight years from the issuance of a final judgment on which it is based” — 12 V.S.A. § 2903(a), read November 6, 2026

Work out a late charge in Vermont

Starts at Vermont's 12%, the rate when none was agreed, not a maximum.

What was not checked for Vermont

• Vermont's 12% (9 V.S.A. § 41a(a)) is for the "forbearance or use of money"; no text read applies it in so many words to an unpaid service invoice.

Check Vermont's own text

Before you charge: read 9 V.S.A. § 41a(a) and the other Vermont 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 Vermont with every state's answer, or with its neighbours just below.

Next door to Vermont

• Massachusetts: 12% if none agreed, depends by agreement
• New Hampshire: depends if none agreed, depends by agreement
• New York: depends if none agreed, 16% for homes

Official sources for Vermont

• 9 V.S.A. § 41a(a) — read November 6, 2026
• 9 V.S.A. § 46 — read November 6, 2026
• 9 V.S.A. § 2405(m) — read November 6, 2026
• 9 V.S.A. § 2401 (definition of "Services") — read November 6, 2026
• 9 V.S.A. § 4001(5) — read November 6, 2026
• 9 V.S.A. § 4002(c) — read November 6, 2026
• 9 V.S.A. § 4007(b) — read November 6, 2026
• 12 V.S.A. § 2903(a) — read November 6, 2026

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