grace period

noun

: a period of time beyond a due date during which a financial obligation may be met without penalty or cancellation

Examples of grace period in a Sentence

The terms of the loan allow for a ten-day grace period.

Recent Examples on the Web

The total assets should land in the $250 million range — enough for the Cougars and Beavers to fund athletic operations and potentially rebuild the conference during the two-year grace period allowed by the NCAA. —Jon Wilner, The Mercury News, 26 Mar. 2024

The administration also created a grace period that would prevent borrowers from going into default during the first year of post-COVID repayment. —Monica Potts, ABC News, 9 Apr. 2024

Word History

First Known Use

1907, in the meaning defined above

Legal Definition

grace period

noun

grace pe·​ri·​od

: a period of time beyond a scheduled date during which a required action (as payment of an obligation) may be taken without incurring the ordinarily resulting adverse consequences (as penalty or cancellation): as

a

: a period of 30 days or one month during which premiums on insurance policies may be paid without penalty

b

: a period of ten days during which certain security interests (as those in fixtures) must be perfected in order to have priority over conflicting security interests under Article 9 of the Uniform Commercial Code

called also days of grace