“Initial Grace Period” is the time between disbursement of loan and collection of regular payment. These are applicable only for loans.

• A user can modify grace period for a loan account before the grace period ends for that account.
• Grace period starts from the disbursal date
• Grace period cannot be inserted within a loan payment period i.e. grace period can exist only before the repayment of loan starts.
• Grace types are:
• No payments - Customer is not required to start repayment until the grace period ends. Interest is not accumulated for this period. In other words, grace is given on both principal and interest. Start date for loan repayment schedule is essentially “pushed out”.
• Interest only payments - The grace is given on principal repayments and not for interest. Customer is required to make regular interest payments but is not required to make payments against the principal during the grace period.

Note:

A loan account can only have one grace period type per account. Once chosen, the grace period type cannot be changed.