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Late Payment Interest in Texas (2026)

6.75% per year (July 2026 judgment rate) — Texas Finance Code §304.003: judgment rate = prime rate (6.75%, July 2026), floor 5%, cap 15%; published monthly by the OCCC. §302.002 sets 6% for liquidated accounts absent an agreed rate, starting 30 days after the amount is due. On a $5,000 invoice 60 days overdue, the money already owed to you looks like this:

Total owed on a $5,000 invoice · 60 days late

$5,055.48

Growing $0.92 every day it stays unpaid

principal
$5,000
interest
$55.48

Rate verified 2026-07-06 · Source: Texas OCCC — Interest rates · Methodology

Calculate your invoice

Rate prefilled from the Texas default (6.75% per year (July 2026 judgment rate)) — override it if your contract sets its own.

$

60 days overdue

%

Texas default: 6.75% per year (July 2026 judgment rate)

Total now owed to you · Texas

$5,055.48

$5,000 principal · 60 days overdue at 6.75%

interest accrued
$55.48
growing daily by
$0.92

Simple interest: amount × (6.75% ÷ 365) × 60 days. Information, not legal advice — contract terms can override statutory defaults.

The rule in plain English

Texas has two relevant defaults. For an unpaid account where no interest rate was agreed, Finance Code §302.002 allows interest at 6% per year, starting on the 30th day after the amount becomes due.

Judgments (and pre-judgment interest in most cases) instead track the judgment rate under §304.003: the prime rate as published by the Federal Reserve, with a floor of 5% and cap of 15%. With prime at 6.75%, the July 2026 judgment rate is 6.75%.

The Office of Consumer Credit Commissioner publishes the applicable rate monthly; a judgment locks in the rate in force when it is rendered.

As everywhere in the US, an agreed contract rate (commonly 1.5% per month in B2B terms) overrides the defaults, subject to usury limits.

Legal basis: Tex. Fin. Code §§302.002, 304.003.

Worked example

invoice = $5,000, 60 days overdue, rate = 6.75%

daily interest = $5,000 × (6.75% ÷ 365) = $0.92

interest = $0.92 × 60 days = $55.48

total owed = $5,055.48

What to include in your demand letter

A short, factual letter recovers more invoices than a heated one. Checklist (general guidance, not legal advice):

  • Invoice number, date, original due date, and the exact principal outstanding.
  • The interest calculation shown line by line — principal, rate (6.75% per year (July 2026 judgment rate)), days overdue, daily amount — so there is nothing to dispute.
  • The legal or contractual basis for the interest (Tex. Fin. Code §§302.002, 304.003; cite your contract clause first if you have one).
  • A single clear deadline (7 or 14 days is customary) and the payment details — remove every excuse for delay.
  • What happens next if unpaid: a letter before action, small claims / court filing, or referral to collections — stated plainly, without threats you don’t intend to keep.
  • A note that interest continues to accrue daily until payment — quote the per-day figure from the calculator above.

FAQ

What interest can I charge on a late invoice in Texas?
Texas Finance Code §304.003: judgment rate = prime rate (6.75%, July 2026), floor 5%, cap 15%; published monthly by the OCCC. §302.002 sets 6% for liquidated accounts absent an agreed rate, starting 30 days after the amount is due. On a $5,000 invoice 60 days overdue, that is about $55.48 in interest. (Tex. Fin. Code §§302.002, 304.003; verified 2026-07-06.)
Do I need a clause in my contract to charge this?
Effectively yes. Texas has no automatic statutory right to add interest to a private commercial invoice — your contract or terms of trade should specify the rate. Without one, you are limited to the default legal rate (6.75% per year (July 2026 judgment rate)) on liquidated debts, typically only recoverable once you pursue the claim.
How is late payment interest calculated?
Simple interest on a daily basis: invoice amount × (annual rate ÷ 365) × days overdue. Interest normally runs from the day after the due date. The calculator above shows the formula with your own numbers.
Does the Texas rate change?
Judgment rate tracks prime monthly (OCCC publication). 6.75% reflects the WSJ prime rate held at the 17 June 2026 FOMC — re-check the OCCC table after each Fed meeting.
Can I really send an invoice for the interest?
Yes — the standard practice is a short statement or updated invoice showing the principal, the daily interest accrued to date and the legal basis (Tex. Fin. Code §§302.002, 304.003). Many creditors find the demand itself prompts payment. This site provides information, not legal advice; for significant sums, confirm your position with a professional before escalating.

This page is general information about Texas, verified 2026-07-06 against Texas OCCC — Interest rates. It is not legal advice, and statutory rules have exceptions and transition rules that a short summary cannot capture. Contract terms often override statutory defaults. For significant or disputed sums, consult a qualified professional in your jurisdiction.

Other jurisdictions

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