Missouri Revised Statutes

Mo. Rev. Stat. § 408.080 (2026)

Interest may be paid on interest

✓ current as of May 2026

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408.080. Interest may be paid on interest — compounding limited to once a month — prohibited for certain loans. — Parties may contract, in writing, for the payment of interest upon interest; but the interest shall not be compounded more often than once a month. Where a different rate is not expressed, interest upon interest shall be at the same rate as interest on the principal debt. Loans governed by section 408.035 are not subject to the provisions of this section.

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(RSMo 1939 § 3232, A.L. 1982 H.B. 1341, et al., A.L. 1992 S.B. 688)

Notes of Decisions

Cited in 12 cases, 1976–2010 · leading case: English v. Empire Dist. Elec. Co., Inc., 220 S.W.3d 849 (Mo. Ct. App. 2007).

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English v. Empire Dist. Elec. Co., Inc., 220 S.W.3d 849 (Mo. Ct. App. 2007). · cites it 5× “§ 408.080[ 4 ] have been complied with and [English] is entitled to prejudgment interest as provided by said statute.”

Boatmen's First Nat'l Bank of Kansas City v. Bogina Petroleum Engineers, 794 S.W.2d 703 (Mo. Ct. App. 1990). · cites it 5× “Boginas contend this constitutes the compounding of interest contrary to the case law in Missouri and § 408.080. Section 408.080 provides that parties may contract in writing for the payment of interest upon interest but the interest shall not be compounded more often than once…”

Fielder v. Credit Acceptance Corp., 19 F. Supp. 2d 966 (W.D. Mo. 1998). · cites it 4× “100 and section 408.080. CAC does not explain or deny the figures Plaintiffs claim are charges for compound interest, nor does CAC point to a provision in the retail installment contracts authorizing compound interest.”

Brockman v. Soltysiak, 49 S.W.3d 740 (Mo. Ct. App. 2001). · cites it 2× “5% (18% APR) will be charged on past due accounts.” This does not indicate clearly that interest will be compounded monthly.”

Affiliated Acceptance Corp. v. Boggs, 917 S.W.2d 652 (Mo. Ct. App. 1996). · cites it 3× “Section 408.080, RSMo 1986. In this case, the promissory notes provide for interest “at the prevailing rate established from time to time at Lender’s corporate office.”

Sloan v. Paris, 541 S.W.2d 316 (Mo. Ct. App. 1976). · cites it 3× “There is a Missouri statute, first adopted in 1845, controlling today, substantially unchanged since its first enactment and undisturbed by the adoption of the Uniform Commercial Code, Section 408.080 RSMo 1969, which states, in pertinent part: “Parties may contract, in writing,…”

Wilner v. O'donnell, 637 S.W.2d 757 (Mo. Ct. App. 1982). · cites it 2× “In their Point III on appeal, in which defendants urge that the $30,000 was *763 exempt from § 408.080 as a business loan, defendants raise two additional matters.”

Nika Corp. v. City of Kansas City, Mo., 582 F. Supp. 343 (W.D. Mo. 1984). “Since under Missouri law any right to compound interest is a creature of statute (here § 408.080), Whitworth v. Davey, 279 Mo. 672 , 216 S.”

St. Louis Cnty. Nat'l Bank v. Maryland Cas. Co., 564 S.W.2d 920 (Mo. Ct. App. 1978). “It argues that under § 408.080 R.S.Mo 1969 such an agreement must be in writing to be enforceable.”

Am. Bank v. Wegener, 776 S.W.2d 922 (Mo. Ct. App. 1989). · cites it 2× “The *924 court limited the compounding to once each year in view of § 408.080, RSMo 1969, in effect when the note was signed.”

English Ex Rel. Davis v. Hershewe, 312 S.W.3d 402 (Mo. Ct. App. 2010). “Defendants failed to allege the correct statute number in their petition allegations concerning prejudgment *407 interest in that they incorrectly referred to § 408.080 rather than § 408.040(2). e. Defendants failed to allege in their pleadings the facts which would have…”

Love Real Est. Co. v. Lincoln Am. Land Ltd. P'ship, 751 S.W.2d 759 (Mo. Ct. App. 1988). · cites it 2× “When this promissory note was drafted the 1982 amendment to § 408.080, RSMo 1978, allowing for the monthly compounding of interest was not in affect.”

— Mo. Rev. Stat. § 408.080(2) — 1 case

Wilner v. O'donnell, 637 S.W.2d 757 (Mo. Ct. App. 1982). “In their Point III on appeal, in which defendants urge that the $30,000 was *763 exempt from § 408.080 as a business loan, defendants raise two additional matters.”

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