Navigating Grace Periods for Credit Cards, Mortgages, and Student Loans

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Understanding Grace Periods: A Comprehensive Guide

At O1ne Mortgage, we prioritize consumer credit and finance education. This post aims to provide an objective view to help you make the best decisions regarding grace periods for various types of loans. For any mortgage service needs, call us at 213-732-3074.

How Does a Grace Period Work?

A grace period is a stretch of time during which you are not charged interest or fees on borrowed money. The length of grace periods can differ by lender and loan type. Understanding these can save you money. Here’s what you need to know about grace periods.

Credit Card Grace Period: About 30 Days

Credit card grace periods typically last about 30 days, from the end of your card’s monthly billing cycle to the due date of the payment. During this time, you can avoid interest charges by paying the statement balance in full each month.

Mortgage Grace Period: About 15 Days

Mortgage grace periods usually extend 15 days past the due date for a given monthly payment. A payment made within this period does not trigger a late penalty charge. For specific details, check your loan agreement or contact your loan servicer.

Student Loan Grace Period: Six to Nine Months

The grace period on a student loan is the time after you leave school before you’re required to begin repaying the loan. For most federal student loans, this period is six months, while Federal Perkins loans offer nine months. Private student loans may vary.

Grace Period vs. Deferment

Both grace periods and deferments allow payments to be made after their due dates without penalty. Grace periods are built into your account agreements, while deferments are arrangements you work out with a lender to help you through a rough financial patch.

Do Payments Made Within the Grace Period Affect Your Credit?

No, payments made within the grace period for any loan type will not have a significant impact on your credit reports or scores. For credit cards, any payment made during the grace period will be on time. For mortgages, late payments are not recorded until they are 30 days past due. For student loans, taking full advantage of the grace period won’t hurt your credit.

The Bottom Line

Familiarizing yourself with the grace periods that apply to your loans and credit card accounts can help you save on interest charges and avoid late fees. When it’s time to seek a new loan or credit account, O1ne Mortgage is here to help. Call us at 213-732-3074 for any mortgage service needs.

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