Legal Question in Credit and Debt Law in Utah

Re: Grace period

Generally no grace period is mandated by law, except for certain government insured loans, i.e., FHA and VA. The reason no grace period is mandated by law is that a financing agreement is a contract. Parties may contract for any terms that they like. Whether or not a grace period is present depends on the language of the contract. Even if you have a grace period, you will still have to pay interest over a greater period of time, thus if you normally would have paid $50 in prinicpal, because you are past the due date, interest must be paid for a longer period of time, and thus you pay less principal. One should use a grace period for only emergencies. Finally, even if your contract does not have a grace period, if you make a payment and the lender accepts it, chances are that you may redeem the contract from "default" - although that is not always the case.