---
title: "Late fee: definition | Desert Rock Capital"
url: "https://www.desertrockcapital.com/glossary/late-fee"
description: "A late fee is a charge a lender applies when a payment is not received by its due date or after any grace period."
---

Loan costs

# Late fee
All lending terms
Definition

A late fee is a charge a lender applies when a payment is not received by its due date or after any grace period. The amount and timing are set in the loan or credit agreement.

A late fee, also called a late charge, is assessed when a scheduled payment arrives after the due date, or after a grace period if the agreement provides one. It may be a flat amount or a percentage of the overdue payment, and applicable laws and the contract govern how much can be charged and when. A late fee is distinct from interest that continues to accrue on an unpaid balance and from a returned-payment fee, which applies when a payment fails to clear. Repeatedly missing payments can also lead to delinquency or default and may be reported, depending on the lender. The exact late-fee terms are stated in the loan or credit agreement.

Source: [Consumer Financial Protection Bureau](https://www.consumerfinance.gov/ask-cfpb/when-are-late-fees-charged-on-a-car-loan-en-839/). This definition is general educational information, not legal or financial advice.
Related

- [Returned-payment (NSF) fee](/glossary/returned-payment-fee)
- [Loan FAQs](/faqs)
- [Personal loans](/services/personal-loans)
Back to the Lending Glossary
More in
Loan costs
Principal
Interest
APR (annual percentage rate)
Fixed interest rate
Origination fee
Borrow with clarity

## Terms in writing, before you sign.

Desert Rock Capital is a licensed Utah lender with no credit check and no collateral. Apply online or visit a branch in Salt Lake City, Orem, or St. George, and get a straightforward decision, usually in about 30 minutes.
See if you qualify