how a grace period works
a grace period allows a borrower or insurance customer to delay payment for a short period of time beyond the due date during this period no late fees are charged and the delay cannot result in default or cancellation of the loan or contract in most cases payment after the due date but during the grace period does not cause a black mark to be added to the borrower s credit report however it s important to check the contract for the specifics on the grace period under some loan contracts no additional interest is charged during the grace period but the majority add compound interest during the grace period 