Late Fee
A charge imposed for overdue payments on loans or credit cards.
Detailed Description
Late Fee
What is a late fee?
A late fee is a financial penalty imposed on a borrower for not making a payment by the due date.
How are late fees typically calculated?
Late fees can be calculated as a fixed dollar amount or a percentage of the overdue amount.
What is the purpose of late fees?
The purpose of late fees is to encourage timely payments and offset administrative costs associated with late payments.
Can late fees impact a borrower's credit score?
Yes, late payments and associated late fees can negatively impact a borrower's credit score.
Are there exceptions to late fees?
Yes, lenders may waive late fees for first-time offenders or in cases of financial hardship.