Late Payment Charges
Definition - What does Late Payment Charges mean?
Late payment charges are fees that a person must pay if he or she is late on a payment for an amount of money owed for something. Late payments commonly occur on things such as mortgages, student loans, car loans, etc. In the context of the law, late payment charges are legally enforceable. Late payments can also negatively affect one's credit score.
Justipedia explains Late Payment Charges
Late charges can either be a fixed price, or they can be a certain percentage of the total amount due on the owed money. Late payment charges exist in order to create negative incentive for not paying on time. Lenders typically only lend money so that they can be paid back (with interest to make a profit). So, if they are not being repaid, this can create a big problem for them. Often, however, if a borrower pays the late payment charges as well as the owed payment, then more extreme penalties are not applied.