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Late Payment Interest in Illinois (2026)

5% per year (pre-judgment) — Illinois Interest Act (815 ILCS 205/2): 5% per year on money due on written instruments and liquidated accounts; judgments accrue 9% (735 ILCS 5/2-1303). On a $5,000 invoice 60 days overdue, the money already owed to you looks like this:

Total owed on a $5,000 invoice · 60 days late

$5,041.10

Growing $0.68 every day it stays unpaid

principal
$5,000
interest
$41.10

Rate verified 2026-07-06 · Source: Illinois General Assembly — Interest Act · Methodology

Calculate your invoice

Rate prefilled from the Illinois default (5% per year (pre-judgment)) — override it if your contract sets its own.

$

60 days overdue

%

Illinois default: 5% per year (pre-judgment)

Total now owed to you · Illinois

$5,041.10

$5,000 principal · 60 days overdue at 5%

interest accrued
$41.10
growing daily by
$0.68

Simple interest: amount × (5% ÷ 365) × 60 days. Information, not legal advice — contract terms can override statutory defaults.

The rule in plain English

Under the Illinois Interest Act, creditors may charge 5% per year on money due under a written instrument or on a liquidated account after it becomes due — this covers a typical unpaid invoice with a fixed amount.

The 5% runs from the due date; "unreasonable and vexatious" delay in payment also triggers the same rate even without an instrument.

Once you obtain a judgment, the rate steps up: most Illinois judgments accrue 9% per year post-judgment.

An explicit contract rate (the common 1.5%/month clause) governs instead for business transactions, which Illinois law broadly permits between businesses.

Legal basis: 815 ILCS 205/2; 735 ILCS 5/2-1303.

Worked example

invoice = $5,000, 60 days overdue, rate = 5.00%

daily interest = $5,000 × (5.00% ÷ 365) = $0.68

interest = $0.68 × 60 days = $41.10

total owed = $5,041.10

What to include in your demand letter

A short, factual letter recovers more invoices than a heated one. Checklist (general guidance, not legal advice):

  • Invoice number, date, original due date, and the exact principal outstanding.
  • The interest calculation shown line by line — principal, rate (5% per year (pre-judgment)), days overdue, daily amount — so there is nothing to dispute.
  • The legal or contractual basis for the interest (815 ILCS 205/2; 735 ILCS 5/2-1303; cite your contract clause first if you have one).
  • A single clear deadline (7 or 14 days is customary) and the payment details — remove every excuse for delay.
  • What happens next if unpaid: a letter before action, small claims / court filing, or referral to collections — stated plainly, without threats you don’t intend to keep.
  • A note that interest continues to accrue daily until payment — quote the per-day figure from the calculator above.

FAQ

What interest can I charge on a late invoice in Illinois?
Illinois Interest Act (815 ILCS 205/2): 5% per year on money due on written instruments and liquidated accounts; judgments accrue 9% (735 ILCS 5/2-1303). On a $5,000 invoice 60 days overdue, that is about $41.10 in interest. (815 ILCS 205/2; 735 ILCS 5/2-1303; verified 2026-07-06.)
Do I need a clause in my contract to charge this?
Effectively yes. Illinois has no automatic statutory right to add interest to a private commercial invoice — your contract or terms of trade should specify the rate. Without one, you are limited to the default legal rate (5% per year (pre-judgment)) on liquidated debts, typically only recoverable once you pursue the claim.
How is late payment interest calculated?
Simple interest on a daily basis: invoice amount × (annual rate ÷ 365) × days overdue. Interest normally runs from the day after the due date. The calculator above shows the formula with your own numbers.
Can I really send an invoice for the interest?
Yes — the standard practice is a short statement or updated invoice showing the principal, the daily interest accrued to date and the legal basis (815 ILCS 205/2; 735 ILCS 5/2-1303). Many creditors find the demand itself prompts payment. This site provides information, not legal advice; for significant sums, confirm your position with a professional before escalating.

This page is general information about Illinois, verified 2026-07-06 against Illinois General Assembly — Interest Act. It is not legal advice, and statutory rules have exceptions and transition rules that a short summary cannot capture. Contract terms often override statutory defaults. For significant or disputed sums, consult a qualified professional in your jurisdiction.

Other jurisdictions

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