Penalty Interest
/ˈpɛnəlti ˈɪn.tər.ɪst/
Definitions
- (n.) Interest charged as a punishment for late payment of a debt or breach of a contractual obligation.
The borrower was required to pay penalty interest on the overdue loan amount.
Forms
- penalty interest
- penalty interests
Related terms
See also
Commentary
Penalty interest serves both as compensation and deterrence for nonperformance or delayed payment, often distinguished from ordinary interest rates.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.