Udhar Interest Rates in India – What's Common
Shops often charge interest on overdue udhar. Here’s what’s common.
Typical Rates
- 1% per month – Common, 12% per annum equivalent
- 2% per month – For longer credit or riskier customers
- Flat per day – Some use ₹X per day per ₹1000
Legal
Interest on trade credit is generally allowed. Avoid very high rates (could be seen as usurious). Document terms clearly.
Communicate
Tell customers: “Interest of X% per month after Y days.” Write it on the khata or invoice.
Use our Udhar Calculator to compute interest. Stockkeeper tracks dues and interest. Join the waitlist.
Frequently Asked Questions
What interest do shops charge on udhar?
1-2% per month is common. Some use flat per-day rates. Document terms clearly.
Is charging interest on udhar legal?
Yes. Avoid very high rates. Document on khata or invoice.
How do I calculate udhar interest?
Use our Udhar Calculator. Simple interest: Principal × (Rate ÷ 100) × (Days ÷ 30).