> For the complete documentation index, see [llms.txt](https://docs.qiro.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.qiro.fi/products/qiro-marketplace/term-loans/repayments/late-fees.md).

# Late Fees

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?

1. **Annualized Penalty**: Late fees are calculated using a yearly interest rate applied to the **overdue amount** (unpaid principal + unpaid interest).
2. **Daily Basis**: Fees accrue based on the **number of days** a payment is delayed, not by seconds or time of day.
3. **Per EMI**: Each delayed EMI is assessed independently — a late fee is calculated for every missed installment.
4. **After Grace Period**: A grace period may be defined per loan. Late fees apply **only after this period ends**.
5. **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.\
  \&#xNAN;*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**.

***

#### ✅ Formula

```
late_fee = unpaid_amount × (late_fee_apr / 365) × days_late_by
```

This gives the penalty amount in currency terms, based on how many days the borrower is overdue.


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://docs.qiro.fi/products/qiro-marketplace/term-loans/repayments/late-fees.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.