You may be wondering what is a late fee if you have signed up for credit solutions or financial products. The late fee meaning is simple. It refers to a penalty or extra charge associated with late payment of your financial obligations. These may include EMIs for a loan, credit card bills, premiums for insurance and more.
Delaying payments of this nature can result in a high amount of your late fee also accrues interest. This happens when it is added to your outstanding amount as a penalty. Here is a late fee example to help you understand the concept: Say you have a credit card bill of ₹20,000, and you did not pay it by the due date. Now, the credit card issuer can and may levy a late fee of ₹500 as per the relevant terms and conditions. This amount is added to your overdue amount, and penal interest will apply not just to ₹20,000 but to ₹20,500.