Default Interest definition: Copy, customize, and use instantly
Introduction
The term "Default Interest" refers to the additional interest rate applied to overdue payments under a contract. It compensates the creditor for delays and incentivizes timely performance, ensuring clarity on financial penalties for late payments.
Below are various examples of how "Default Interest" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Default Interest" as a fixed percentage
This definition ties "Default Interest" to a predetermined rate.
"Default Interest" means the interest calculated at a fixed rate of [insert percentage]% per annum, applied to overdue amounts from the payment due date until full settlement is made.
Definition of "Default Interest" as a variable rate
This definition connects "Default Interest" to an adjustable base rate.
"Default Interest" refers to the interest calculated at a rate equal to [insert base rate, e.g., LIBOR, SOFR] plus [insert margin]% per annum, applied to overdue amounts until they are fully repaid.
Definition of "Default Interest" as a penalty for late payments
This definition ties "Default Interest" to a financial penalty.
"Default Interest" means the additional interest rate of [insert percentage]% per annum applied to overdue payments, in addition to any other applicable fees or charges outlined in this agreement.
Definition of "Default Interest" as applicable after a grace period
This definition applies "Default Interest" after a specific grace period.
"Default Interest" refers to the interest charged at [insert percentage]% per annum on overdue amounts, effective after a grace period of [insert number] days from the payment due date.
Definition of "Default Interest" as a compounded rate
This definition ties "Default Interest" to compounded calculations.
"Default Interest" means the interest calculated at [insert percentage]% per annum, compounded [insert frequency, e.g., monthly, quarterly], on all overdue amounts until they are fully settled.
Definition of "Default Interest" as tiered rates
This definition applies "Default Interest" to escalating rates.
"Default Interest" refers to the interest charged at [insert percentage]% per annum for the first [insert number] days of default, increasing to [insert higher percentage]% per annum for defaults exceeding this period.
Definition of "Default Interest" as the lesser of a fixed rate or maximum legal rate
This definition ties "Default Interest" to a statutory cap.
"Default Interest" means the interest applied to overdue amounts at the lesser of [insert percentage]% per annum or the maximum rate permitted under applicable law.
Definition of "Default Interest" as applicable to secured loans
This definition connects "Default Interest" to secured lending agreements.
"Default Interest" means the interest charged at [insert percentage]% per annum on overdue amounts secured by collateral, applied until the full repayment of the outstanding balance.
Definition of "Default Interest" as tied to performance obligations
This definition applies "Default Interest" to non-performance of obligations.
"Default Interest" refers to the interest calculated at [insert percentage]% per annum on amounts overdue due to non-performance or delay in fulfilling obligations under this agreement.
Definition of "Default Interest" as applicable to cross-border contracts
This definition ties "Default Interest" to international agreements.
"Default Interest" means the interest charged at [insert percentage]% per annum on overdue payments, adjusted for currency exchange fluctuations where applicable.
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Definition of "Default Interest" as a flat rate
This definition ties "Default Interest" to a fixed, non-variable rate.
"Default Interest" refers to the interest calculated at a flat rate of [insert percentage]% per annum, applied to any overdue payments, and compounded annually until fully paid.
Definition of "Default Interest" as a daily rate
This definition applies "Default Interest" on a daily basis.
"Default Interest" means the interest charged at a rate of [insert percentage]% per day, applied to overdue amounts from the due date until full payment is made.
Definition of "Default Interest" as a penalty for missed milestones
This definition connects "Default Interest" to milestones in performance.
"Default Interest" refers to the interest charged at [insert percentage]% per annum on overdue payments resulting from missed project milestones or deadlines, accruing from the missed milestone date.
Definition of "Default Interest" as related to breach of terms
This definition ties "Default Interest" to specific contractual breaches.
"Default Interest" means the interest charged at [insert percentage]% per annum for overdue payments or amounts resulting from the breach of any material term of this agreement.
Definition of "Default Interest" as interest plus fees
This definition includes both interest and additional charges.
"Default Interest" refers to the interest charged at [insert percentage]% per annum on overdue amounts, plus any applicable late fees or additional charges as specified in this agreement.
Definition of "Default Interest" as a cumulative penalty
This definition refers to accumulating penalties.
"Default Interest" means the interest calculated at [insert percentage]% per annum on overdue amounts, compounded monthly, with interest accumulating on both principal and previously accrued interest until fully paid.
Definition of "Default Interest" as waived under specific conditions
This definition ties "Default Interest" to exceptions.
"Default Interest" refers to the interest charged at [insert percentage]% per annum on overdue payments unless waived by the creditor upon written notice, in which case the overdue amount shall not incur default interest.
Definition of "Default Interest" as applicable only during extended default periods
This definition specifies when interest starts accruing.
"Default Interest" means the interest applied at [insert percentage]% per annum to overdue payments, but only after the overdue period exceeds [insert number] days.
Definition of "Default Interest" as a fixed sum for each default
This definition sets a fixed penalty for each occurrence of default.
"Default Interest" refers to a fixed amount of [insert sum] to be charged for each instance of overdue payment, in addition to any interest applied at the rate of [insert percentage]% per annum.
Definition of "Default Interest" as applied to both principal and costs
This definition extends the interest to cover costs and principal.
"Default Interest" means the interest charged at [insert percentage]% per annum on the overdue principal amount as well as any applicable costs incurred due to the delay in payment.
Definition of "Default Interest" as time-limited accruals
This definition applies interest for a limited duration.
"Default Interest" refers to the interest charged at [insert percentage]% per annum on overdue amounts, accruing only for a maximum period of [insert number] days from the payment due date.
Definition of "Default Interest" as a negotiated rate
This definition ties "Default Interest" to agreed-upon terms.
"Default Interest" means the interest charged at a rate mutually agreed upon by the parties, specified in writing, and applicable to overdue payments under this agreement.
Definition of "Default Interest" as calculated on a per-payment basis
This definition applies "Default Interest" to individual missed payments.
"Default Interest" refers to the interest applied at [insert percentage]% per annum, calculated separately for each overdue payment from its respective due date.
Definition of "Default Interest" as adjusted for inflation
This definition ties "Default Interest" to inflation-indexing.
"Default Interest" means the interest charged at [insert percentage]% per annum on overdue payments, adjusted periodically based on the applicable inflation index.
Definition of "Default Interest" as cumulative for repeated defaults
This definition applies higher rates for recurring defaults.
"Default Interest" refers to the interest applied at an escalating rate of [insert initial percentage]% per annum, increasing by [insert increment]% for each successive default within the term of this agreement.
Definition of "Default Interest" as offset by early partial payments
This definition accounts for early payments against defaults.
"Default Interest" means the interest applied at [insert percentage]% per annum, reduced proportionally by any partial payments made before the expiration of the grace period.
Definition of "Default Interest" as applicable to unapproved deferrals
This definition applies "Default Interest" to unauthorized delays.
"Default Interest" refers to the interest charged at [insert percentage]% per annum on deferred payments not approved in writing by the creditor.
Definition of "Default Interest" as tiered by overdue amount
This definition varies interest by the size of the default.
"Default Interest" means the interest charged at [insert percentage]% per annum for overdue amounts up to [insert threshold], and [insert higher percentage]% per annum for amounts exceeding this threshold.
Definition of "Default Interest" as reduced during force majeure
This definition adjusts interest during extraordinary circumstances.
"Default Interest" refers to the interest charged at a reduced rate of [insert percentage]% per annum on overdue payments affected by a force majeure event, as determined under this agreement.
Definition of "Default Interest" as imposed following creditor notice
This definition requires notice for interest accrual.
"Default Interest" means the interest applied at [insert percentage]% per annum, commencing only after the creditor has issued a formal notice of default to the debtor.
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.