Reference · Tennessee · 2026
Tennessee late payment interest rate
When your contract sets no rate, the Tennessee figure for interest on an overdue B2B invoice is ≤ 10% (equitable), under Tenn. Code § 47-14-123.
Prejudgment interest MAY be awarded in equity up to 10% — it is not an automatic entitlement, so treat it as a ceiling, not a right.
- Rate
- ≤ 10% (equitable)
- Statute
- Tenn. Code § 47-14-123
- Type
- Fixed by statute.
- Source
- law.justia.com · verified July 9, 2026
Statute text read on law.justia.com, a legal mirror, because the official Tennessee site blocks automated access. Confirm it against the official code before relying on it in a dispute.
Work out the interest on your invoice
Prefilled with Tennessee's 10% ceiling — a court may award less.
Interest you can claim
$164.38
$10,164.38 with the invoice · $2.74 a day
The ceiling
How high can a late fee go in Tennessee?
Your contract decides. The rate above only applies when your terms are silent. Between businesses, an agreed late-interest rate or late fee replaces it, within two limits: the state's ceiling on agreed rates, and the rule that a late fee must compensate you rather than punish the customer.
Tennessee's ceiling on an agreed rate wasn't part of our verified research, so check the state's usury law, or ask a lawyer licensed in Tennessee, before writing the common 1.5%-a-month (18%) rate into your terms.
Late payment wording for a Tennessee invoice
On your invoice
Payment is due by the date shown on this invoice. We reserve the right to claim interest on any amount not paid when due, as allowed under Tenn. Code § 47-14-123.
This restates what Tennessee law applies when your contract is silent. If your contract sets a rate, quote that instead. The wording doesn't say when interest starts, because that differs by state; the note at the top of this page covers it where Tennessee law sets it.
How Tennessee compares
Tennessee is one of 4 states with no rate that applies on its own, along with Maine, New Mexico and South Dakota. Elsewhere the middle of the range is 8%.
Interest is the fallback. Getting paid on time is the plan.
DueTrail turns overdue invoices into managed cases with reviewable reminders and recorded promises to pay, so invoices get settled before anyone reaches for Tenn. Code § 47-14-123.