Banking Exam Question - What is 'Grace Period' in Term Loan? What are the NRB Directives (2074) about Grace Period? Explain

Introduction - Grace Period Provision in Term Loan

• Generally, a period of more than one year will not be provided for periodic loan of Grace period.
• If the maximum grace period is to be provided more than that, on the basis of the reasons for which more grace period has to be done, the loan will be accepted as approved by the above officer, to accept the loan.
• For this purpose, the highest level management committee will be the committee.

Explanation: Grace period means the loan flow date will begin to pay the date for starting the loan.

What is 'Grace Period'?

A grace period is the provision in most loan and insurance contracts that allows payment to be received for a certain period of time after the actual due date. During this period, no late fees are charged, and the late payment does not result in default or cancellation of the loan. A typical grace period is 15 days.

The time after the due date for a loan payment during which one may make the payment without any late fees or penalties. The length of the grace period depends on the loan terms, but is usually around 15 days.