I guess what you are afraid of is charging an amount that would be considered usury.  Because remember that a monthly late fee of 1% is 12% annually.  In your state the maximum legal rate of interest for a personal loan is 20%. Post judgment interest may be set at either 12% or 18% depending on whether the court finds that a defense was frivolous. So I would settle for something at 12% annually or below.  But you are going to have to amend your prior contracts.  Going forward is no problem but you can not unilaterally amend the contract.  It has be agreed upon with the client.  I might consult with an attorney in your are to be sure.  Good luck.