Late fees are charged when a borrower misses a scheduled repayment. These fees serve as a penalty for delayed payments and are distributed pro-rata to all investors, since the capital at risk belongs to them.
⏱ When Are Late Fees Charged?
Annualized Penalty: Late fees are calculated using a yearly interest rate applied to the overdue amount (unpaid principal + unpaid interest).
Daily Basis: Fees accrue based on the number of days a payment is delayed, not by seconds or time of day.
Per EMI: Each delayed EMI is assessed independently — a late fee is calculated for every missed installment.
After Grace Period: A grace period may be defined per loan. Late fees apply only after this period ends.
Charged Upfront on Repayment: The late fee amount is collected along with the delayed payment, at the time the borrower clears their dues.
📘 How Late Fees Are Calculated
🔢 Key Terms
late_fee_apr – The annualized late fee interest rate.
Example: 4% late fee per year → 0.04
unpaid_amount – The portion of the installment that was not paid on time (Principal + Interest).
days_late_by – Number of days past due, excluding any grace period.
