Accrued interest clause: Copy, customize, and use instantly
Introduction
An accrued interest clause specifies the interest rate that will be applied to outstanding amounts, and how interest accumulates over time. It is important in agreements where payments are delayed or extended, ensuring that the creditor is compensated for the time value of money. This clause details the rate at which interest will accumulate, when it will be calculated, and how it will be applied to the outstanding balance.
Below are templates for accrued interest clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard accrued interest clause
This version sets a fixed interest rate for the accrued interest.
Interest on any overdue amounts shall accrue at a rate of [X]% per annum, calculated daily and compounded monthly, from the date the payment was due until the balance is paid in full.
Accrued interest clause with provision for monthly interest calculation
This version calculates interest on a monthly basis.
Interest on the outstanding balance will accrue at a rate of [X]% per annum. The interest will be calculated monthly and added to the principal, with the interest rate applicable to the new balance from the following month.
Accrued interest clause with provision for simple interest
This version applies simple interest.
Any overdue amounts shall accrue simple interest at a rate of [X]% per annum. Interest will be calculated on the original outstanding balance, without compounding, and added to the total due at the end of each month.
Accrued interest clause with provision for daily interest calculation
This version calculates interest daily.
Interest on any overdue amounts shall accrue at a rate of [X]% per annum, calculated on a daily basis. The daily rate will be applied to the outstanding balance and added to the total due each day.
Accrued interest clause with provision for compounded interest
This version applies compounded interest.
The interest on any overdue amounts will accrue at a rate of [X]% per annum, compounded monthly. Interest will be calculated on the principal amount plus any previously accrued interest, and added to the balance due each month.
Accrued interest clause with provision for interest on overdue invoices
This version applies to overdue invoices.
If any invoice remains unpaid after the due date, interest will accrue on the overdue amount at a rate of [X]% per annum, compounded monthly. The interest will be calculated from the original due date until the invoice is fully paid.
Accrued interest clause with provision for interest during extended payment period
This version applies during an extended payment period.
If payment terms are extended, interest will accrue on the outstanding balance at a rate of [X]% per annum, compounded quarterly. The interest will be added to the balance each quarter until the full amount is paid.
Accrued interest clause with provision for interest rate change after a specified period
This version changes the interest rate after a specified period.
Interest on any overdue payments will accrue at a rate of [X]% per annum for the first [X] days. After this period, the interest rate will increase to [Y]% per annum, calculated daily on the outstanding balance until paid.
Accrued interest clause with provision for fixed interest rate
This version uses a fixed interest rate.
Interest will accrue on any unpaid amounts at a fixed rate of [X]% per annum. The interest will be calculated annually and added to the outstanding balance, which will increase accordingly.
Accrued interest clause with provision for interest calculation based on market rates
This version ties the interest rate to market rates.
The interest rate on overdue amounts will be based on the prevailing market rate as determined by [specified financial institution], plus [X]%. The interest rate will adjust quarterly in line with changes in the market rate.
Accrued interest clause with provision for interest on unpaid penalties
This version includes interest on unpaid penalties.
Any unpaid penalties or fines will accrue interest at a rate of [X]% per annum, compounded monthly, until the full amount is paid. The interest will begin accumulating from the date the penalty was assessed.
Accrued interest clause with provision for interest on late payments in multiple installments
This version applies interest to late payments in installments.
If payment is made in multiple installments, interest will accrue on each installment separately at a rate of [X]% per annum. The interest for each installment will be calculated from the due date of the installment until it is fully paid.
Accrued interest clause with provision for penalty interest rate
This version includes a penalty interest rate.
If the payment is overdue for more than [X] days, the interest rate will increase to [Y]% per annum, calculated daily, until the overdue amount is paid in full.
Accrued interest clause with provision for interest on partial payments
This version applies interest to partial payments.
If only a partial payment is made, interest will accrue on the remaining balance at a rate of [X]% per annum, compounded daily, and added to the total outstanding amount until the balance is fully settled.
Accrued interest clause with provision for interest suspension during dispute resolution
This version suspends interest during disputes.
If a dispute arises over any unpaid amounts, interest on the outstanding balance will be suspended during the dispute resolution period. Once the dispute is resolved, interest will resume at the rate of [X]% per annum from the original due date.
Accrued interest clause with provision for different interest rates for different overdue amounts
This version applies different rates for different overdue amounts.
Interest on overdue amounts will accrue at a rate of [X]% per annum for amounts up to [$X]. For amounts exceeding [$X], the interest rate will increase to [Y]% per annum, compounded monthly.
Accrued interest clause with provision for interest rates based on the duration of the overdue period
This version adjusts the interest rate based on the duration of the overdue period.
If the overdue amount is not paid within [X] days, interest will accrue at a rate of [X]% per annum for the first [X] days. If payment is delayed beyond [X] days, the interest rate will increase to [Y]% per annum for the remaining overdue period.
Accrued interest clause with provision for automatic interest accrual
This version includes automatic interest accrual.
Interest on overdue payments will automatically accrue at a rate of [X]% per annum from the due date, and will be added to the outstanding balance each month without the need for further notice or calculation.
Accrued interest clause with provision for waived interest on early payment
This version waives interest for early payment.
If the full outstanding balance is paid within [X] days of the due date, the accrued interest will be waived. If payment is not made by this deadline, interest will accrue at a rate of [X]% per annum, compounded monthly.
Accrued interest clause with provision for interest on unpaid taxes
This version applies to unpaid taxes.
Any unpaid taxes under this Agreement will accrue interest at a rate of [X]% per annum, compounded monthly, from the date they become due until paid in full.
Accrued interest clause with provision for interest based on a daily rate
This version calculates interest on a daily rate.
Interest on overdue amounts will be calculated at a daily rate of [X]% of the annual interest rate, based on the principal amount outstanding, until the balance is paid in full.
Accrued interest clause with provision for interest on overdue invoices for extended periods
This version applies to invoices overdue for extended periods.
If an invoice remains unpaid for more than [X] days, interest will accrue on the overdue amount at a rate of [X]% per annum, compounded daily. The interest will continue to accumulate until the invoice is fully settled.
Accrued interest clause with provision for rate change after [X] days overdue
This version changes the interest rate after a certain period.
If payment is not received within [X] days of the original due date, the interest rate will increase to [X]% per annum, compounded monthly. The interest will apply to the overdue balance from the original due date.
Accrued interest clause with provision for interest calculation on outstanding contract balance
This version applies to the outstanding contract balance.
Interest will accrue at a rate of [X]% per annum on the outstanding contract balance. The interest will be calculated from the date the payment was due until the balance is paid in full.
Accrued interest clause with provision for interest compounded quarterly
This version compounds interest quarterly.
Interest on overdue payments will accrue at a rate of [X]% per annum, compounded quarterly. The interest will be added to the outstanding balance at the end of each quarter, and will accrue additional interest in the following quarter.
Accrued interest clause with provision for recalculating interest after late payment
This version recalculates interest after late payment.
If payment is overdue for more than [X] days, interest will be recalculated on the entire balance at the rate of [X]% per annum, compounded monthly. The new interest rate will apply to both the principal and any previously accrued interest.
Accrued interest clause with provision for interest adjustment based on market conditions
This version adjusts interest based on market conditions.
Interest on any overdue amount will be calculated at [X]% per annum, but if the prevailing market interest rate, as published by [specified financial institution], changes by more than [X]%, the interest rate will be adjusted accordingly and apply from the date of the market change.
Accrued interest clause with provision for specific payment terms for partial payments
This version applies to partial payments.
If partial payments are made, interest will continue to accrue at a rate of [X]% per annum on the unpaid portion. The interest will be applied to the outstanding balance and recalculated with each partial payment.
Accrued interest clause with provision for interest rate suspension in the event of a dispute
This version suspends interest during disputes.
If there is a dispute regarding any overdue amounts, interest on the outstanding balance will be suspended during the dispute resolution process. Once the dispute is resolved, the interest will resume, and any accrued interest during the dispute period will be added to the balance.
Accrued interest clause with provision for interest-free payment extension
This version offers an interest-free extension.
If the payment term is extended for an additional [X] days, no interest will accrue during this extension period. After the extension, interest will accrue at a rate of [X]% per annum on the outstanding balance.
Accrued interest clause with provision for retroactive interest charges
This version applies retroactive interest.
Interest on overdue amounts will accrue at a rate of [X]% per annum, starting from the original due date. If any payment is not made within [X] days of the due date, the interest will be charged retroactively, including the period from the original due date until payment is made.
Accrued interest clause with provision for interest on the total contract amount
This version applies interest to the total contract amount.
The interest rate of [X]% per annum will be applied to the total contract amount, and interest will accrue daily until the full payment is made, starting from the date the payment was due.
Accrued interest clause with provision for reduction of interest for early settlement
This version reduces interest for early settlement.
If the full amount is paid before the end of the extended payment period, a discount of [X]% will be applied to the accrued interest, reducing the total interest owed under this Agreement.
Accrued interest clause with provision for interest based on outstanding balance
This version applies interest based on the outstanding balance.
Interest on overdue amounts will accrue at a rate of [X]% per annum, calculated on the total outstanding balance each month. Interest will be calculated on the principal plus any previously accrued interest.
Accrued interest clause with provision for fixed term interest rate
This version sets a fixed interest rate for a term.
For the first [X] months of the overdue period, the interest will accrue at a fixed rate of [X]% per annum. After [X] months, the interest rate will increase to [Y]% per annum for the remainder of the overdue period.
Accrued interest clause with provision for interest after default event
This version applies interest after a default event.
In the event of default by [Party B], interest will accrue on the overdue balance at a rate of [X]% per annum, compounded daily, until the full amount is paid, starting from the date of the default.
Accrued interest clause with provision for interest during extension periods
This version includes interest during extension periods.
Interest will accrue on the overdue amount during any agreed extension period at a rate of [X]% per annum, compounded monthly. The new interest rate will apply from the date the extension period begins until the overdue amount is settled.
Accrued interest clause with provision for interest as a penalty for late payments
This version treats interest as a penalty.
If payment is not received within the agreed terms, interest will accrue as a penalty at a rate of [X]% per annum, calculated daily, starting from the original due date until the payment is made in full.
Accrued interest clause with provision for fixed-rate interest during renegotiations
This version applies a fixed rate during renegotiations.
If renegotiation of the payment terms is required due to delayed payments, a fixed interest rate of [X]% per annum will apply to the overdue balance, regardless of changes in the market rate, until an agreement is reached.
Accrued interest clause with provision for automatic interest adjustments
This version automatically adjusts interest.
Interest on overdue amounts will automatically adjust to [X]% per annum based on changes to the prime lending rate published by [specified financial institution]. This adjusted rate will apply to all overdue balances and will be recalculated monthly.
Accrued interest clause with provision for a payment schedule that includes interest
This version includes interest in the payment schedule.
[Party B] agrees to make payments under a revised schedule, where each installment includes both a portion of the principal and the accrued interest, calculated at a rate of [X]% per annum, to be paid until the outstanding balance is settled.
Accrued interest clause with provision for interest adjustment based on creditworthiness
This version adjusts interest based on creditworthiness.
The interest rate on overdue amounts will be [X]% per annum, but may be increased to [Y]% per annum if [Party B]’s creditworthiness decreases, as determined by [credit rating agency], during the term of the Agreement.
Accrued interest clause with provision for reduced interest after a specified period
This version reduces interest after a period.
If payment remains overdue for more than [X] days, the interest rate will be reduced to [X]% per annum, provided that at least [Y]% of the outstanding balance has been paid. The reduced interest rate will apply to the remaining balance until it is settled.
Accrued interest clause with provision for compound interest on late payments
This version applies compound interest on late payments.
Interest on overdue amounts will accrue at a rate of [X]% per annum, compounded monthly. The interest will be calculated on the principal amount and any previously accrued interest, and added to the balance due at the end of each month.
Accrued interest clause with provision for fluctuating interest rate
This version applies a fluctuating interest rate.
The interest rate on any overdue amount will be based on the [specified index] plus [X]%, subject to adjustment every [X] days to reflect changes in the [specified index].
Accrued interest clause with provision for annual recalculation of interest
This version recalculates interest annually.
The interest rate on overdue amounts will be recalculated annually based on the prevailing [interest rate index]. The new rate will apply to any outstanding balance from the date of recalculation until the balance is paid.
Accrued interest clause with provision for interest on defaulted installments
This version includes interest on defaulted installments.
If any installment payment is not made by the due date, the outstanding installment balance will accrue interest at a rate of [X]% per annum, compounded monthly, from the default date until paid.
Accrued interest clause with provision for maximum interest cap
This version includes a cap on interest.
The interest rate on overdue amounts will be [X]% per annum, but in no event shall the total interest charged exceed [Y]% of the outstanding balance, regardless of the length of the overdue period.
Accrued interest clause with provision for interest accrual in case of partial payments
This version applies interest on partial payments.
If [Party B] makes partial payments, interest will accrue at a rate of [X]% per annum on the unpaid portion of the total balance, compounded monthly, until the full balance is paid.
Accrued interest clause with provision for interest on overdue taxes
This version applies interest to overdue taxes.
Any overdue taxes under this Agreement will accrue interest at a rate of [X]% per annum, compounded daily, from the due date until paid in full.
Accrued interest clause with provision for interest on unapproved costs
This version applies interest to unapproved costs.
If any unapproved costs are incurred and remain unpaid, interest will accrue on those costs at a rate of [X]% per annum, calculated daily, from the date they were incurred until they are paid.
Accrued interest clause with provision for interest on past-due amounts after contract termination
This version applies interest after termination.
If this Agreement is terminated and any amounts remain unpaid, interest will accrue on the past-due balance at a rate of [X]% per annum, compounded monthly, from the termination date until the full amount is settled.
Accrued interest clause with provision for interest based on overdue days
This version adjusts interest based on overdue days.
Interest on overdue payments will accrue at a rate of [X]% per annum, calculated daily. The daily interest will apply from the original due date, with the total amount of interest recalculated after each [X] days overdue.
Accrued interest clause with provision for compounded quarterly interest
This version compounds interest quarterly.
Interest will accrue on any overdue amounts at a rate of [X]% per annum, compounded quarterly. The interest will be added to the outstanding balance and will accrue additional interest in subsequent quarters.
Accrued interest clause with provision for prepayment of interest
This version allows prepayment of interest.
[Party B] may prepay any accrued interest during the extended payment period. Prepayment of interest will reduce the total outstanding amount, and the rate will be recalculated to reflect the early payment of interest.
Accrued interest clause with provision for interest after contract cancellation
This version includes interest after cancellation.
If this Agreement is canceled by either Party, any overdue amounts remaining will accrue interest at a rate of [X]% per annum, compounded daily, from the cancellation date until full payment is made.
Accrued interest clause with provision for interest based on overdue payment amount
This version applies interest based on the overdue amount.
The interest rate on overdue payments will be determined by the amount of the overdue balance. If the overdue balance exceeds [$X], the interest rate will be [X]%, and if it is less than [$X], the rate will be [Y]%.
Accrued interest clause with provision for interest after a grace period
This version includes a grace period before interest applies.
No interest will accrue during the first [X] days of the overdue period. After the grace period, interest will be calculated at a rate of [X]% per annum, compounded monthly, and will be added to the balance due.
Accrued interest clause with provision for interest during contract performance delay
This version applies interest during performance delays.
If there is a delay in the performance of this Agreement caused by [Party B], interest will accrue on any amounts owed as a result of the delay at a rate of [X]% per annum, compounded daily, until the issue is resolved.
Accrued interest clause with provision for interest based on delayed payment frequency
This version adjusts the interest rate based on payment frequency.
Interest on overdue amounts will accrue at a rate of [X]% per annum, calculated daily. If the overdue payment remains unpaid for [X] weeks, the interest rate will increase to [Y]% per annum for the duration of the delay.
Accrued interest clause with provision for automatic interest application on overdue balances
This version applies automatic interest.
Interest will automatically accrue on any overdue balance at a rate of [X]% per annum, calculated daily. The interest will be added to the outstanding balance without the need for further action, and will be included in subsequent payments.
Accrued interest clause with provision for interest on late fees
This version includes interest on late fees.
If any late fees are assessed due to delayed payments, interest will accrue on those fees at a rate of [X]% per annum, compounded monthly, from the date the late fee was applied until it is paid in full.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.