Posted by Blane (MI) on February 03, 2001 at 19:02:56:
Mark,
I charge $25 plus $3/day late fees on any delinquent interest and/or principal until it’s paid in full. Buyers know when the payment is due, and if it’s late, it’s their problem. If it gets quite large, whose fault is that?
I cut someone slack once, they tried to slide again, so had to put the hammer down. Fixed the problem. Plus, any late fees/charges are a nice kick to your yield. Why give it up? Some may handle it differently, but I don’t give it up unless absolutely necessary. My purchase agreement AND promissory are very clear about the charges. Hope this helps.
If they are late for thirty days, and then they make a payment, do you folks keep charging the late fees until thye are fully paid up? That could get quite large since it is a daily penalty.
Most of my buyers never get caught up if they get 30 days behind, so I have just been charging them for the 30 days penalty and then calling it even. Is this being too lenient? What is standard procedure for a commercial note? I have never seen a note that has a daily penalty, so I don’t know how to handle this, and the note itself is not clear about this. I know that a regular note charges a penalty every month until you are fully paid up, but how about the daily penalties?