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What is the maximum late fee under a payment agreement for a consumer product?

Hastings, MN |

I am in Minnesota but selling an item to a person in another state. If this isn't "interstate commerce," I don't know what is. The buyer wishes to make payments on the item (in sort of a "layaway" arrangement), and I will ship the item once the payments have all been made. Is there a maximum late fee I can charge for a late payment? There will be no interest charges in the payment agreement other than this possible late fee, if that can be considered "interest." If there is a maximum late fee, what is it?

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Attorney answers 1


You can typically rely on 8% as the maximum charge on a late payment, which is the maximum interest allowed under the usury statutes for amounts borrowed under $100K to consumers (and also the max allowed under a recent amendment to the MN landlord/tenant laws).

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