How much interest has accrued?
Default interest is the law’s price for paying late: the lending rate of Danmarks Nationalbank plus 8 percentage points. It accrues on the principal from the due date, and it keeps accruing until the claim is paid. On a claim that has been outstanding for two years, it is no trifle.
How it is calculated
- 01 Interest is calculated on the principal — not on the total claim with fees added. Interest on fees has no legal basis.
- 02 It accrues from the due date, if one has been agreed. If no due date was agreed, interest only starts running 30 days after you have made a demand for payment.
- 03 The reference rate is set on 1 January and 1 July. A claim that has been outstanding across several half-years must therefore be calculated with shifting rates — a single fixed rate over three years will not hold up in the bailiff’s court.
- 04 Between businesses you may agree a higher rate than the statutory one. If a rate is stated in your terms of trade, that is the rate that applies.
What is often got wrong
That is too much. Interest accrues on the principal. Charge interest on fees, and you hand the debtor an objection that holds.
The reference rate changes every half-year. An interest statement with one fixed rate across several years can be challenged — and it will be.
Then the statutory rate applies. It is one of the cheapest improvements available: write a higher rate into your terms, and it applies to business customers.
Frequently asked questions
Which interest rate applies to late payment?
The statutory rate is the lending rate of Danmarks Nationalbank plus 8 percentage points. If you have agreed a higher rate in your terms of trade, and the customer is a business, the agreed rate applies.
From when does interest accrue?
From the due date, if one has been agreed. If no due date was agreed, interest only starts running 30 days after you have made a demand for payment — which is why a due date on the invoice is not a formality.
Can I claim compound interest?
No, not as a starting point. Interest is calculated on the principal, not on the principal plus interest already accrued.
- Default interest (morarente) Default interest is the interest that runs on an overdue claim — as a starting point, Nationalbanken's lending rate plus 8 percentage points.
- Principal (hovedstol) The principal is the original claim, excluding interest, fees and costs.
- Due date (forfaldsdato) The due date is the day by which payment must have been received at the latest — and the day from which interest and reminders can start to run.
- Renteloven (the Danish Interest Act) Renteloven lays down what interest and what fees may be charged when payment is late.
- Statement of default interest The specification of default interest — the one that has to stand up to recalculation if the claim ends up in the bailiff's court.
- Terms of trade with interest and fee clauses The clauses that decide whether you may charge interest at all, take the goods back and litigate on your home ground.
The figure is one thing. The money is another.
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