Business, Legal & Accounting Glossary
A period of time during which you are not required to make payments on a debt. For example, most credit cards give you a grace period of 20-30 days before you have to pay interest on the amount of your purchases. Cash advances, however, usually have no grace period; interest begins to accumulate from the date of the withdrawal, even if you pay your bills on time. Also, some student loans give you a grace period after graduating or dropping out of school. During this time, you are not required to make payments on your loan.
n. a time stated in a contract in which a late payment or performance may be made without penalty. Often after the grace period ends without payment or performance by the person who is supposed to pay, the contract is suspended. Example: if a person does not pay his/her insurance payment (premium) by the stated deadline, he/she usually has a few days extra to pay before the absolute deadline. If the person does not pay by then, the insurance company cancels the contract, i.e. your insurance.
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This glossary post was last updated: 28th April, 2020 | 3 Views.