In most cases both companies and individuals resort to external financing, through credits. However, they are often unable to proceed or fail to respect payment deadlines, and may be subject to late payment interest, applied to these delay periods and accumulated to the amount to be settled. What is late payment interest? Interest on late payment is considered as penalties and compensation referring to the amount payable by the debtor for the delay in the settlement of tax obligations owed to the injured entities, which may be public (State, Social Security, Tax Authority, among others) or private entities (banks, among others). This interest rate varies according to the classification of the entities from which the loan is requested, as public entities have a different rate than private entities.
Late payment interest rates With regard to interest rates on debts owed to public entities, these are defined annually by the Treasury and Public Debt Management Agency until December 31, so that the rate can be applied in the following calendar year. According to Notice no. 369/2021, the interest rate in force as of January 1, 2021 for public Algeria Phone Number entities is 4.705% (below that of 2020, which was 4.786%). Regarding interest rates applicable to private entities, an annual surcharge may also be applied to be added to the contract rate up to a maximum of 3%, which serves to protect families and consumers in debt (in addition to other charges) . In addition to this fee, banking entities may also apply a recovery fee for each overdue installment, which can only be charged.
Once and cannot exceed 4% of the commission and, in absolute value, be between 12 and the 150 euros. How is late payment interest calculated? In order to calculate the interest on late payment, it is essential to know the amount owed, the number of days of late payment, the late payment interest rate, if it is a public entity and the nominal annual rate (TAN) of the loan you have taken out, if it is a private entity. Debt to private entity: In case defined by the Bank of Portugal Failure to pay your loan on time can interfere with getting a new loan in the future, as well as lead to other, more serious problems. We suggest that you negotiate and carefully read all the items when applying for a loan.