Interest in a late fee | Rabbi Jonathan Blass | Ask the Rabbi | yeshiva.co

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Question

Is charging a late fee on a tuition or registration as charging interest? Could you site sources, please.

Answer

A one-time fine for paying after a certain date is permitted (Shulchan Aruch Yoreh Deah 177 14-16; Shach Yoreh Deah 177 33; see Shu"t Shevet HaLevi VIII 193). If the fine is per month or per week this is more problematic and the institution should use a "heter iska".

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