From the calculated figure to the payment
Calculating default interest is the easy part. Actually receiving it is harder. This article shows what belongs in a reminder, how part payments are applied, what a court payment order does and how much time you have. It is not legal advice.
What belongs in the reminder
A reminder is a clear demand to pay a claim that is due. To also serve as a basis for interest, it should contain:
- invoice number, invoice date and outstanding amount,
- the start of default and its basis (payment deadline, earlier reminder or 30-day rule),
- the default interest accrued so far with rate and period,
- for businesses the €40 flat fee per invoice,
- a clear payment deadline with a date and the bank details.
Several reminder stages are not required by law. If the debtor is already in default, for instance because a fixed payment date has passed, interest runs anyway. The reminder then mainly serves to quantify the claim and build pressure.
Example with an interest statement
A supplier has a claim of €5,000 against a company; default has existed since 1 Jun 2026. On 1 Aug 2026 he writes a reminder. The interest up to then amounts to:
- 1 Jun to 30 Jun 2026: 30 days at 10.27% = €42.21
- 1 Jul to 31 Jul 2026: 31 days at 10.52% = €44.67
Together €86.88 interest and the €40 flat fee. The late payment interest calculator produces such a statement automatically, and you can send it by email or share it as a link.
Applying part payments correctly
If the debtor pays only part, the question is what the money is applied to. § 367(1) BGB sets the order: first to costs, then to interest and last to the principal. If the debtor specifies a different application, the creditor may refuse the payment (§ 367(2) BGB).
For the interest calculation this means: the principal only decreases once costs and accrued interest are covered. In the example, the debtor pays €2,000 on 1 Aug 2026. Leaving the flat fee aside for simplicity, the payment first covers the €86.88 interest, and the remaining €1,913.12 reduces the principal to €3,086.88. Only this amount bears further interest from 1 Aug 2026. Up to 1 Oct 2026 that is 61 days at 10.52% = €54.27.
In the calculator you do this in two steps: first calculate the full amount up to the day of the part payment, then calculate the remaining amount with the day of the part payment as the start of default up to the next end date.
The court payment order
If the debtor does not pay despite a reminder, the German court dunning procedure is a comparatively inexpensive way to obtain an enforceable title. The application is filed online with the central dunning courts. Interest is stated there as running interest, usually in the form “interest at 9 percentage points above the base rate since …”. The court then applies the rate valid at any time. Interest already accrued up to a certain date can also be claimed as a fixed amount, but then not additionally as running interest for the same period.
Service of the payment order has the same effect as a reminder (§ 286(1) sentence 2 BGB), so it can itself trigger default. If the debtor objects, the procedure turns into a lawsuit. The legal costs calculator estimates the costs that may then arise.
If a money debt is sued for, the debtor owes interest from the time the action is pending anyway, even without default (§ 291 BGB). The rate is the same as default interest under § 288 BGB.
Keep the limitation period in mind
Claims from invoices generally become time-barred after three years (§ 195 BGB). The period starts at the end of the year in which the claim arose and the creditor knew about it (§ 199(1) BGB). An invoice that became due in May 2026 is therefore time-barred at the end of 31 December 2029.
A reminder does not suspend the limitation period. Only measures such as a lawsuit or service of a court payment order do (§ 204(1) nos. 1 and 3 BGB). Anyone pursuing an old claim too late loses not only the principal but also the interest: dependent interest becomes time-barred together with the main claim (§ 217 BGB).
Common mistakes
- Interest on interest: under § 289 BGB no default interest is payable on interest. Accrued interest is not added to the principal.
- Part payment booked wrongly: deducting a part payment directly from the principal gives away interest.
- Outdated base rate: in a reminder covering several half-years, each section must be calculated with its own rate.
Conclusion
A good reminder states principal, interest and flat fee in a traceable way and sets a clear deadline. Part payments go first to costs and interest. If the debtor does not react, a court payment order secures the claim and suspends the limitation period. The calculation basics are in the guide to late payment interest.