When a payment (a loan installment, an invoice, a severance payment) is made later than the date it was due, in addition to the amount owed, an additional interest charge may accrue to compensate for that delay: late-payment interest.
What late-payment interest is
It's the additional financial compensation that accrues when a payment isn't made within the agreed or legally established deadline. Its purpose differs from a loan's ordinary interest (which pays for the use of the borrowed capital over the whole agreed term): late-payment interest specifically compensates for the delay past a payment date that has already passed.
How it's calculated
Late-payment interest = Amount owed × Late-payment interest rate × (Days late ÷ 365)
The applicable late-payment interest rate varies depending on the type of relationship involved: in consumer loans, the law caps the maximum late-payment interest rate that can be agreed (generally linked to the agreed remuneratory interest plus a limited additional margin); in business-to-business relationships, there's a commercial late-payment interest rate set periodically by specific regulation; and for employment-related debts (such as an unpaid severance payment), specific rules also apply.
The legal limit on consumer loans
Spanish courts have repeatedly capped late-payment interest agreed in consumer loans that they considered disproportionate, establishing case-law criteria on what additional spread over the remuneratory interest is considered reasonable, beyond which the late-payment interest could be declared abusive and therefore void.
Late-payment interest in commercial transactions between businesses
For payments between businesses arising from commercial transactions, there's a specific statutory late-payment interest rate, set periodically by the Bank of Spain under the regulation against late payment in commercial transactions, applied automatically when no other rate has been expressly agreed in the contract.
Why claiming late-payment interest isn't always worth the effort
Although you're entitled to claim late-payment interest for a delayed payment, its amount over short delay periods can be small, so in practice many claims focus mainly on recovering the principal owed, including late-payment interest as an additional component within the overall claim, not as the main goal on its own.
Keep this cost in mind if you're the one falling behind on a payment
If you're having trouble meeting a payment deadline (for example, a loan installment), it's worth getting ahead of it and negotiating with the lender before falling behind, since the accumulated cost of late-payment interest can significantly increase your total debt if the situation drags on.
Calculate the cost of your financing without delays
Our personal loan calculator lets you calculate the installment and total cost of a loan under normal conditions, as a reference against the additional cost that any payment delay would generate.