Why would you not pay the $1000 for a year? That makes no sense.
Look the bottom line is that 4% for any single month is not enforceable. The total of 4% x 12 months is 48%.

You cannot legally do it. Late fees are not a way for a cop to make money. They are to recoup any damages caused by the late payment.

The court held that New York’s usury statute that an interest charge of more than 25% per year is a criminal offense determined such fees as unenforceable.