Grace period refers to the time in which your lender is allowing you to wait before starting to make payments. It can also refer to the time between receiving your bill and the actual due date of the payment. You will often hear about grace periods when discussing student loans. Many lenders, both private and federal, do offer borrowers a six-month grace period between leaving school and being required to start making payments on the outstanding loans. Interest will be accruing during this time unless you have a subsidized student loan, in which case it may not. You can start making payments on your loans during the grace period, especially if you want to minimize the accruing interest. The grace period generally kicks in as soon as you graduate, drop below half-time enrollment or leave school early. Typically, you will only get one grace period, which means if you leave for a semester and use the grace period you won’t get another one after you graduate. Be sure to confirm with each of your lenders how long your grace period extends so you’re ready when it’s time to start making payments.
About Erin Lowry
Erin Lowry is a millennial personal finance expert, speaker, and author of the book, “BROKE MILLENNIAL: Stop Scraping By and Get Your Financial Life Together.” The book, inspired by Erin’s website, BrokeMillennial.com, is packed with refreshingly simple advice and hilarious true stories. It's the essential roadmap every financially clueless millennial needs to become a money master.