A person approved for a loan or credit typically pays interest to the lender, known as credit interest. Normally, the person receives a statement each month indicating a portion of the amount to be paid is for loan/credit repayment, and another part is for interest costs. The portion that represents interest is shown on the statement. The late payment interest and interest rate percentage are agreed upon when the loan/credit is signed, usually specified in the contract terms. Late payment interest is calculated from the due date and added to the debt until the principal is fully paid off.