Loan Grace Period Calculator
Calculate a loan with a grace period: the payment during the grace months (interest-only or nothing), the balance when repayment starts, the payment afterwards and the extra interest the grace period costs.
How it works
Partial grace: payment = P × i during the grace months, balance stays P · Total grace: balance = P × (1 + i)ᵍ · payment afterwards = B × i ÷ (1 − (1 + i)⁻ⁿ) · extra interest = total interest − interest of the same loan with no grace
Student loans, business loans, construction and agricultural credits often start with a grace period. In a partial grace period you pay only the interest, so the debt does not grow; in a total grace period you pay nothing and the unpaid interest is capitalized — added to the balance — so you then pay interest on interest. Either way the grace months are not free: they push the whole repayment later and raise the total cost.
Worked example
A 50,000 loan at 10% with a 6-month partial grace period: during the grace months you pay only interest, 50,000 × 10% ÷ 12 = 416.67 a month, so the balance is still 50,000 when repayment starts. The 48 payments that follow are 1,268.13 each — the same as with no grace — but the 6 months of interest add 2,500.00 to the cost, for 13,370.20 of total interest. With total grace the balance would grow to about 52,553 and the payment would rise.
Sources: Wikipedia — Grace period · Wikipedia — Capitalized interest
Frequently asked questions
What is the difference between partial and total grace?
With partial grace you pay the interest each month and the balance stays the same. With total grace you pay nothing, and the interest is added to what you owe, so the later payments are larger.
Does a grace period make the loan more expensive?
Yes. You keep the money longer, so more interest accrues. The calculator shows the extra interest compared with starting repayment right away over the same repayment term.
Should I pay the interest during a total grace period anyway?
If you can, yes: paying the monthly interest stops it from being capitalized and turns the total grace into a partial one, which lowers every later payment.
Is a grace period the same as deferment or forbearance?
They work the same way mathematically — payments are paused and interest usually keeps accruing — but deferment and forbearance are granted later, while a grace period is part of the original loan terms.
Related calculators
Estimates for education and planning, not financial advice. Lenders’ contracts, fees, day-count and rounding rules differ — check the official cost disclosure (APR / TAE / CAT) in your loan or card agreement before deciding.